FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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)
Home
Total
Nursing
$ 929,000 $ 270,000
471,000 112,000
458,000
158,000
69,800
44,000
8,900
20,800
115,800
40,800
185,800
54,000
415,400
124,500
$ 42,600 $ 33,500
Required 1A Required 1B
*Allocated on basis of program revenues.
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?
Complete this question by entering your answers in the tabs below.
< Required 1A
1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A,
should the Housekeeping program be discontinued?
Meals on
Wheels Housekeeping
$ 401,000 $ 258,000
207,000
152,000
194,000
106,000
40,300
20,600
7,400
15,800
38,400
36,600
80,200
51,600
166,300
124,600
$ 27,700 $ (18,600)
What is the financial advantage (disadvantage) of discontinuing the Housekeeping program?
Required 1B
>
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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) Home Total Nursing $ 929,000 $ 270,000 471,000 112,000 458,000 158,000 69,800 44,000 8,900 20,800 115,800 40,800 185,800 54,000 415,400 124,500 $ 42,600 $ 33,500 Required 1A Required 1B *Allocated on basis of program revenues. 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? Complete this question by entering your answers in the tabs below. < Required 1A 1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? Meals on Wheels Housekeeping $ 401,000 $ 258,000 207,000 152,000 194,000 106,000 40,300 20,600 7,400 15,800 38,400 36,600 80,200 51,600 166,300 124,600 $ 27,700 $ (18,600) What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Required 1B >
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