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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 Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance. Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) Total $ 920,000 480,000 440,000 70,100 43,400 116,100 184,000 413,600 $ 26,400 Home Nursing $ 261,000 119,000 142,000 8,300 20,500 41,000 52,200 122,000 $ 20,000 Meals On Wheels $ 400,000 204,000 196,000 40,800 7,700 38,900 80,000 167,400 $ 28,600 House-keeping $ 259,000 157,000 102,000 Prev 21,000 15,200 36,200 51,800 124, 200 $ (22,200) "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 $26,400 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 seamented income statement format be more useful to management in assessing the long-run financial viability of the 1 of 2 Next >

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 Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance. Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) Total $ 920,000 480,000 440,000 70,100 43,400 116,100 184,000 413,600 $ 26,400 Home Nursing $ 261,000 119,000 142,000 8,300 20,500 41,000 52,200 122,000 $ 20,000 Meals On Wheels $ 400,000 204,000 196,000 40,800 7,700 38,900 80,000 167,400 $ 28,600 House-keeping $ 259,000 157,000 102,000 Prev 21,000 15,200 36,200 51,800 124, 200 $ (22,200) "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 $26,400 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 seamented income statement format be more useful to management in assessing the long-run financial viability of the 1 of 2 Next >

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 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 Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) Total $920,000 480,000 440,000 70,100 43,400 116,100 184,000 413,600 $ 26,400 Home Nursing $ 261,000 119,000 142,000 8,300 20,500 41,000 52,200 122,000 $ 20,000 Meals On Wheels $ 400,000 204,000 196,000 < Prev 40,800 7,700 38,900 80,000 167,400 $ 28,600 *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 $26,400 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping program. 1 of 2 House-keeping $ 259,000 157,000 102,000 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. 21,000 15, 200 36, 200 51,800 124, 200 $ (22,200) 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 seamented income statement format be more useful to management in assessing the long-run financial viability of the *** HH Next >
Transcribed Image Text: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 Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) Total $920,000 480,000 440,000 70,100 43,400 116,100 184,000 413,600 $ 26,400 Home Nursing $ 261,000 119,000 142,000 8,300 20,500 41,000 52,200 122,000 $ 20,000 Meals On Wheels $ 400,000 204,000 196,000 < Prev 40,800 7,700 38,900 80,000 167,400 $ 28,600 *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 $26,400 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping program. 1 of 2 House-keeping $ 259,000 157,000 102,000 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. 21,000 15, 200 36, 200 51,800 124, 200 $ (22,200) 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 seamented income statement format be more useful to management in assessing the long-run financial viability of the *** HH Next >
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