2a Question format -

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: Total $ 929,000 478,000 451,000 Home Nursing $ 269,000 111,000 158,000 Meals On Wheels $ 409,000 208,000 201,000 House- keeping $ 251,000 159,000 92,000 Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overheads Total fixed expenses Net operating income (loss) 69,600 43,500 116,200 185,800 415,100 $ 35,900 8,300 20,700 41,000 53,800 123,800 $ 34,200 41,000 7,200 38,900 81,800 168,900 $ 32,100 20,300 15,600 36,300 50,200 122,400 $ (30,400) 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 $35,900 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. 2-6. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? Prepare a properly formatted segmented income statement. Total Home Nursing Meals On Wheels House- keeping Revenues Variable expenses Contribution margin Traceable fixed expenses: Depreciation Liability insurance Program administrators' salaries Total traceable fixed expenses Program segment margins General administrative overhead Net operating income (loss)