Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who live in their own homes within the Cumberland County area. Three services are provided for seniors-home nursing, Meals on Wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals on Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. Data on revenue and expenses for the past year follow: Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Operating income (loss) *Allocated on the basis of program revenues. Home Meals on House- Total $1,071,000 598,300 472,700 Nursing $309,400 Wheels $476,000 keeping $285,600 146,600 257,500 194,200 162,800 218,500 91,400 75,220 9,520 42,850 22,850 49,030 22,850 8,900 17,280 127,350 44,750 40,850 41,750 214,200 61,880 95,200 57,120 $ 465,800 6,900 139,000 187,800 $ 23,800 $ 30,700 139,000 $(47,600) The head administrator of Cumberland County Senior Services, Judith Ewa, is concerned about the organization's finances and considers the operating income of $6,900 last year to be razor-thin. (Last year's results were very similar to the results for previous years and are representative of what would be expected in the future.) She feels that the organization should be building its financial reserves at a more rapid rate in order to prepare for the next inevitable recession. After seeing the above report, Ewa asked for more information about the financial advisability of discontinuing the housekeeping program. The depreciation in the housekeeping category 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. Depreciation charges assume zero salvage value. 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. Compute the change in net operating income for the company as a whole if housekeeping program be discontinued. Answer is complete but not entirely correct. Decrease in net operating income by $ 112,320 Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who live in their own homes within the Cumberland County area. Three services are provided for seniors-home nursing, Meals on Wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals on Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. Data on revenue and expenses for the past year follow: Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Operating income (loss) *Allocated on the basis of program revenues. Home Meals on House- Total $1,071,000 598,300 472,700 Nursing $309,400 Wheels $476,000 keeping $285,600 146,600 257,500 194,200 162,800 218,500 91,400 75,220 9,520 42,850 22,850 49,030 22,850 8,900 17,280 127,350 44,750 40,850 41,750 214,200 61,880 95,200 57,120 $ 465,800 6,900 139,000 187,800 $ 23,800 $ 30,700 139,000 $(47,600) The head administrator of Cumberland County Senior Services, Judith Ewa, is concerned about the organization's finances and considers the operating income of $6,900 last year to be razor-thin. (Last year's results were very similar to the results for previous years and are representative of what would be expected in the future.) She feels that the organization should be building its financial reserves at a more rapid rate in order to prepare for the next inevitable recession. After seeing the above report, Ewa asked for more information about the financial advisability of discontinuing the housekeeping program. The depreciation in the housekeeping category 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. Depreciation charges assume zero salvage value. 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. Compute the change in net operating income for the company as a whole if housekeeping program be discontinued. Answer is complete but not entirely correct. Decrease in net operating income by $ 112,320
Expert Answer:
Answer rating: 100% (QA)
Okay here are the steps to solve this problem 1 If the housekeeping program is discontinued the asso... View the full answer
Posted Date:
Students also viewed these accounting questions
-
b. Suppose that in the past, the population proportion of homes that were predominantly non-brick was 59%. Use a hypothesis test to determine if there is evidence in the data at the 1% level of...
-
there are ways to improve capital. Hiring additional medical staff and expanding the tram can help take on more patients and increase revenue. They suggest using a working capital loan to hire new...
-
Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who live in their own homes within the Cumberland County area. Three services are...
-
Episode 1: A New War Begines Vanderbilt How did Vanderbilts upbringing affect his business attitudes? Which product Vanderbilt decided to sell, as he knew good entrepreneur find something that...
-
Suppose we have a stochastic model Yi = xi + i Where the is are independent with mean 0 and variance 2xi. Show that the weighted least squares estimator of is = /x. Is the standard error for that...
-
Consider a 2-m deep swimming pool. The pressure difference between the top and bottom of the pool is (a) 12.0 kPa (b) 19.6 kPa (c) 38.1 kPa (d ) 50.8 kPa (e) 200 kPa
-
Identify a package that you believe to be inferior. Explain why you think the package is inferior, and discuss your recommendations for improving it.
-
The Web sites for Lenovo (China; www.lenovo.com), Nokia (Finland; www.nokia.com ), and Banco do Brasil (Brazil; www.bb.com.br, click on English) contain substantial information about how these firms...
-
A statistics teacher states the probability of a surprise quiz on any given day is 0.30. If quizzes are given independently each day, what is the probability there will be a surprise quiz on the next...
-
It was my first time sitting on the other side of the desk. I have been asked by my Dean to serve as the Interim Director of the Marilyn Magaram Center (MMC), a Food Science, Nutrition, and Dietetics...
-
The goal of the project assessment is to determine how the organization can better handle the problem of imitators and counterfeiters. The organization should consider the following areas when...
-
14. Financial leverage impacts the performance of the firm by: * (2 Points) decreasing the volatility of the firm's EBIT. Maintaining the same level of volatility of the firm's EBIT. the volatility...
-
in c# convert the code below that uses Rational Methods to use Overloaded Operators. using System; /* 10.8 (Rational Numbers) Create a class called Rational for performing arithmetic with fractions....
-
Method 2We can determine the potential size of the target market utilizing a top-down method and the already available market data.The data presented estimates a $12.6 billion market for women's...
-
An epicyclic gear train consists of sun wheel S, a fixed internal gear E and three identical planet wheels P carried on a star-shaped planet carrier C, as shown in Fig. 15.20. The planets rotate at...
-
Assume a one-period put option with Strike price is $100, the current stock price is S=$100 and the stock can increase or decrease in price by 10%. The risk-free rate is r=5% (per period), R= 1+r and...
-
What can you achieve if you divide your search engine marketing account into relevant campaigns and ad groups? Drive more traffic to your website Target more people in different areas of the world...
-
If the jobs displayed in Table 18.24 are processed using the earliestdue-date rule, what would be the lateness of job C? TABLE 18.24 Processing Times and Due Dates for Five Jobs Job C D E...
-
What are the three cash positions for a company?
-
What is a value date?
-
What is a concentration account?
Study smarter with the SolutionInn App