Revenues Variable expenses Contribution margin Fixed expenses Depreciation Liability insurance Program administrators salaries General administrative overhead Total fixed expenses Net operating income (loss) "Allocated on the basis of program revenues. Home Nursing $ 269,000 120,000 Meals On Wheels $ 404,000 House- Total keeping $ 924,000 $251,000 478,000 204,000 154,000 446,000 149,000 200,000 97,000 69,500 8,200 40,200 20,600 43,300 20,400 7,000 15.100 115,100 41,000 39,000 35,100 184,800. 53,800 412,700 123,400 168,300 121,000 $ 33,300 $25,600 $31,700 (24,000) 80,800 50,200 The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $33,300 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. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, 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. Req 1A Reg 18 Req 2A Req 281 < Prev 4 of 6 Next >>