Problem $11-19($Algo$)$ Dropping or Retaining a Segment $[$LO$11-2]$

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:

$*$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 $$28,000$ 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.