Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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: Total $ 927,000 469,000 458, 000 Home Nursing $ 267,000 110,000 157,000 Meals On Wheels $ 405,000 207,000 198, 000 House- keeping $ 255,000 152,000 103, 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, 800 43, 200 115, 300 185, 400 413, 700 44, 300 9,000 20, 300 40, 500 53, 400 123, 200 33, 800 40,500 7, 100 38, 700 81,000 167, 300 30, 700 20, 300 15,800 36, 100 51, 000 123, 200 $ (20, 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 $44,300 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: David Spiceland

11th Edition

1264134525, 9781264134526

More Books

Students also viewed these Accounting questions

Question

How did the authors avoid the post hoc fallacy?

Answered: 1 week ago

Question

5. It is the needs of the individual that are important.

Answered: 1 week ago