Problem 13-19 (Algo) Dropping or Retaining a Segment [LO13-2) 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: Hood Meals On House- Total Nursing Wheels keeping $930,000 $ 269,000 $ 407.000 $ 254,000 470,000 120,000 195,000 155,000 460,000 149,000 212,000 99.00 Revenues Variable expenses Contribution margin Fixed expensest Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Het operating income (loss) 69,400 3,200 40,700 20,500 43,500 20,300 7.700 15,500 114,400 40,200 38,00 35,400 186,000 53,800 81,400 613,300 122.500 163.600 122 200 546,700. 5. 26,500 $ 43,400 $(23,200) "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 $46,700 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 jobs. 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 Bability 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? 16. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Reg 1A should the Housekeeping program be discontinued? 2-a. Prepare a properly formatted segmented income statement 2b. 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 1 Reg 10 Reg 2 Reg 20 What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? SA Reg 1B > Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Reg 28 Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Rea 1A, should the Housekeeping program be discontinued? Yes NO 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 28 Prepare a properly formatted segmented income statement. Total Home Nursing Meals On Wheels House- keeping Revenues Variable expenses Contribution margin Traceable foxed expenses Depreciation Liability insurance Program administrators salaries Total traceable faced expenses Program segment margins General administrative overhead Not operating income (loss) Complete this question by entering your answers in the tabs below. Req 1A Req 18 Reg 2 Reg 20 Would a segmented income statement format be more useful to management in assessing the long run financial viability of the various services? Yes ONO
