Total $932,000 $ 479,000 453,000 Home Nursing 267,000 $ 115,000 152,000 Meals On House- Wheels keeping 408,000 $ 257,000 206,000 158,000 202,000 99,000 69,500 42,700 Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) 8,600 20,400 40,900 40,200 7,100 38,400 20,700 15,200 36,500 115,800 186,400 414,400 $ 38,600 $ 53,400 123,300 28,700 $ 81,600 51,400 167,300 123,800 34,700 $(24,800) *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 $38,600 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