Problem 12-19 Dropping or Retaining a Segment [L012-2] Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors-home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Home Meals On House- Total Nursing Wheels keeping $ 925,000 $ 262,000 $ 404,000 $ 259,000 460,000 117,000 190,000 153,000 465,000 145,000 214,000 106,000 Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Net operating income (loss) 69,600 8,700 40,500 20,400 44,600 21,000 7,600 16,000 115,700 40,400 38,400 36,900 185,000 52,400 80,800 51,800 414,900 122,500 167,300 125, 100 $ 50,100 $ 22,500 $ 46,700 $(19,100) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $50,100 to be unsatisfactory, therefore, she is considering the possibility of discontinuing the housekeeping program. The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided. Required: 1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? 1-b. Should the Housekeeping program be discontinued? 2-a. Prepare a properly formatted segmented income statement. 2-b. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Reg 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Reg 14 Ren 1R