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) Total $ 932,000 473,000 459,000 Home Nursing $ 267,000 119,000 148,000 69,600 8,300 42,800 20,300 114, 200 40,600 186,400 53,400 413,000 122,600 $ 46,000 $ 25,400 Meals On Wheels $ 410,000 200,000 210,000 House- keeping $ 255,000 154,000 101,000 40,700 7,200 38,300 82,000 168, 200 $ 41,800 $ (21,200) 20,600 15,300 35,300 51,000 122, 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 $46,000 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 > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Revenues Variable expenses Contribution margin Traceable fixed expenses: Prepare a properly formatted segmented income statement. Depreciation Liability insurance Program administrators' salaries Total traceable fixed expenses Req 2A Program segment margins General administrative overhead Net operating income (loss) Req 2B Total 0 Home Nursing 0 0 $ 0 0 0 Meals On Wheels $ 0 0 0 House- keeping 0 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) Total $ 932,000 473,000 459,000 Home Nursing $ 267,000 119,000 148,000 69,600 8,300 42,800 20,300 114, 200 40,600 186,400 53,400 413,000 122,600 $ 46,000 $ 25,400 Meals On Wheels $ 410,000 200,000 210,000 House- keeping $ 255,000 154,000 101,000 40,700 7,200 38,300 82,000 168, 200 $ 41,800 $ (21,200) 20,600 15,300 35,300 51,000 122, 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 $46,000 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 > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Revenues Variable expenses Contribution margin Traceable fixed expenses: Prepare a properly formatted segmented income statement. Depreciation Liability insurance Program administrators' salaries Total traceable fixed expenses Req 2A Program segment margins General administrative overhead Net operating income (loss) Req 2B Total 0 Home Nursing 0 0 $ 0 0 0 Meals On Wheels $ 0 0 0 House- keeping 0

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