Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who...
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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: 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. Total Home Nursing $ 934,000 465,000 469,000 $ 264,000 111,000 153,000 Meals On Wheels $ 410,000 204,000 206,000 House- keeping $ 260,000 150,000 110,000 68,800 8,300 40,200 20,300 44,800 21,000 7,900 15,900 114,800 40,600 39,000 35,200 186,800 52,800 82,000 52,000 415,200 122,700 169,100 123,400 $ 53,800 $ 30,300 $ 36,900 $ (13,400) The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $53,800 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 Req 1B Req 2A Req 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? < Req 1A Req 1B > 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: 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. Total Home Nursing $ 934,000 465,000 469,000 $ 264,000 111,000 153,000 Meals On Wheels $ 410,000 204,000 206,000 House- keeping $ 260,000 150,000 110,000 68,800 8,300 40,200 20,300 44,800 21,000 7,900 15,900 114,800 40,600 39,000 35,200 186,800 52,800 82,000 52,000 415,200 122,700 169,100 123,400 $ 53,800 $ 30,300 $ 36,900 $ (13,400) The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $53,800 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 Req 1B Req 2A Req 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? < Req 1A Req 1B >
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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