PROBLEM 12-19 Dropping or Retaining a Segment LO12-2 Jackson County Senior Services is a monprofit organization devoted to providing essential ser- vices 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 ntal Analysis: The Key to Decision M Total Nursing Wheelskeeping 900,000 $260,000 $400.000 $240.000 Revenues Contribution margin Fxed expenses 68,000 0 40.000 20.000 7,000 15,000 15,000 40,000 38,000 37 000 180000 400 405.000 120000 165.000 120,000 42.000 20,000 Liability insurance Program administrators" salaries General administrative overhead Total fised expenses Net operating income 0os s Sooo. 20000!5.000 40.000 The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $5,000 to be umatisfactory, therefore, she is comsidering the pos- sibility of discontinuing the housekeeping program. The depreciation in housckeeping is for a small van that is used to carry the housckeepers and their eqaipment from job to joh. If the to a charitable organization. None of the peneral 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 program were discontinued, the van would he dosated Required 1. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program discontinued? Explain Should the Housekeeping program be Prepare a properly formatted segmented income statement thar would be more wseful to man- in the long-run financial viability of its various services