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Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data 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) *Allocated on the basis of program revenues. Meals on Wheels $ 406,000 Housekeeping $ 251,000 Total $ 919,000 482,000 Home Nursing $262,000 119,000 203,000 160,000 437,000 143,000 203,000 91,000 70,200 8,700 40,600 20,900 43,000 20,600 7,100 15,300 115,900 40,900 38,300 36,700 183,800 52,400 81,200 50,200 412,900 122,600 167,200 123,100 $ 24,100 $ 20,400 $ 35,800 $ (32,100) The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program. The depreciation in housekeeping is for a small van 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 was 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?

Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data 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) *Allocated on the basis of program revenues. Meals on Wheels $ 406,000 Housekeeping $ 251,000 Total $ 919,000 482,000 Home Nursing $262,000 119,000 203,000 160,000 437,000 143,000 203,000 91,000 70,200 8,700 40,600 20,900 43,000 20,600 7,100 15,300 115,900 40,900 38,300 36,700 183,800 52,400 81,200 50,200 412,900 122,600 167,200 123,100 $ 24,100 $ 20,400 $ 35,800 $ (32,100) The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program. The depreciation in housekeeping is for a small van 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 was 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?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data 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) *Allocated on the basis of program revenues. Meals on Wheels $ 406,000 Housekeeping $ 251,000 Total $ 919,000 482,000 Home Nursing $262,000 119,000 203,000 160,000 437,000 143,000 203,000 91,000 70,200 8,700 40,600 20,900 43,000 20,600 7,100 15,300 115,900 40,900 38,300 36,700 183,800 52,400 81,200 50,200 412,900 122,600 167,200 123,100 $ 24,100 $ 20,400 $ 35,800 $ (32,100) The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program. The depreciation in housekeeping is for a small van 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 was 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?
Transcribed Image Text:Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data 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) *Allocated on the basis of program revenues. Meals on Wheels $ 406,000 Housekeeping $ 251,000 Total $ 919,000 482,000 Home Nursing $262,000 119,000 203,000 160,000 437,000 143,000 203,000 91,000 70,200 8,700 40,600 20,900 43,000 20,600 7,100 15,300 115,900 40,900 38,300 36,700 183,800 52,400 81,200 50,200 412,900 122,600 167,200 123,100 $ 24,100 $ 20,400 $ 35,800 $ (32,100) The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program. The depreciation in housekeeping is for a small van 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 was 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?
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