Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in...
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Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data for the past year follow: Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Meals on Wheels $ 403,000 209,000 Housekeeping Total $ 926,000 474,000 Home Nursing $ 266,000 113,000 $ 257,000 152,000 452,000 153,000 194,000 105,000 69,300 8,500 40,200 20,600 43,500 20,200 7,500 15,800 114,100 40,600 38,300 35,200 185,200 53,200 80,600 51,400 412,100 122,500 166,600 123,000 $ 39,900 $ 30,500 $ 27,400 (18,000) Net operating income (loss) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program. The depreciation in housekeeping is for a small van 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 was 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? Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data for the past year follow: Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Meals on Wheels $ 403,000 209,000 Housekeeping Total $ 926,000 474,000 Home Nursing $ 266,000 113,000 $ 257,000 152,000 452,000 153,000 194,000 105,000 69,300 8,500 40,200 20,600 43,500 20,200 7,500 15,800 114,100 40,600 38,300 35,200 185,200 53,200 80,600 51,400 412,100 122,500 166,600 123,000 $ 39,900 $ 30,500 $ 27,400 (18,000) Net operating income (loss) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program. The depreciation in housekeeping is for a small van 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 was 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?
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Answer rating: 100% (QA)
1 Revenue and Expense Data Analysis Revenues Home Nursing 266000 Meals on Wheels 403000 Housekeeping 257000 Variable Expenses Home Nursing 105000 Meals on Wheels 69300 Housekeeping 8500 Contribution M... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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