2 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 Home Meals On House- Total Nursing Wheels keeping $ $ $ $ 920,000 265,000 405,000 250,000 465,000 110,000 198,000 157,000 455,000 155,000 207,000 93,000 Variable expenses. Contribution margin Fixed expenses: Depreciation 70,000 8,900 40,800 20,300 Liability insurance. 44,200 20,800 7,500 15,900 35,000 Program administrators' salaries 114,100 40,500 38,600 General administrative overhead* 184,000 53,000 81,000 50,000 Total fixed expenses 412,300 123,200 167,900 121,200 $ $ $ $ 42,700 31,800 39,100 (28,200) Net operating income (loss) *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 $42,700 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? 75 bints eBook Print eference