Sunshine Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within Southern California. 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 $922,000 $269,000 $402,000 $ 251,000 469,000 116.000 194,000 159,000 453,000 153,000 208,000 92,000 Revenues Variable expenses Contribution margin Pixed expenses Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Net operating income (loss) 70, 100 8,400 40,800 20,900 44,100 21,000 7,200 15,900 115,700 40,290 38,900 36,600 184,400 53,80 B0.400 50,200 414,300 123,400 167.300 123,600 $ 38,700 $ 29,600 $ 40,700 $(31,600) "Allocated on the basis of program revenues The head administrator of Sunshine Services, Patsy Pearsall, considers last year's net operating income of $38,700 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 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 ability insurance and the salary of the program administrator would be avoided. Required: The head administrator of Sunshine Services, Patsy Pearsall, considers last year's net operating income of $38,700 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 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: 1-3. 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 Reg 1A, should the Housekeeping program be discontinued? Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Hall 11 Req 10 > 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? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? Yes No
