8th Edition

ISBN: 9781259917066

Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.

Publisher: Mcgraw-hill Education,

Textbook Question

Chapter 11, Problem 19P

Dropping or Retaining a Segment
Jackson Count Senior Services is a nonprofit organization devoted to providing essential services to seniors who lie in their own homes within the Jackson Count ea Three services e provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow.

Chapter 11, Problem 19P, Dropping or Retaining a Segment Jackson Count Senior Services is a nonprofit organization devoted to

The head administrator of Jackson County Senior Seniors, Judith Miyama, considers last sears net operating income of $5,000 to be unsatisfactory therefore, she is considering the possibility of discontinuing the housekeeping program.
The depreciation in housekeeping is for a small in 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. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program Should the Housekeeping program be discontinued Explain.
2. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run financial viability of its various services.

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Chapter 11, Problem 18P

Chapter 11, Problem 20P

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Dropping or Retaining a Segment 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: The head administrator of Jackson County Senior Services, Judith Miyama, considers last year’s net operating income of $5,000 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.…

ackson 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: Total Home Nursing Meals On Wheels House - keeping Revenues $ 929,000 $ 268, 000 $ 408,000 $ 253,000 Variable expenses 481,000 115,000 209,000 157,000 Contribution margin 448,000 153,000 199,000 96,000 Fixed expenses: Depreciation 69,000 8,300 40, 500 20, 200 Liability insurance 43,200 20, 300 7,600 15,300 Program administrators' salaries 114,600 40,700 38,400 35, 500 General administrative overhead *185,800 53, 600 81, 600 50, 600 Total fixed expenses 412,600 122,900 168, 100 121,600 Net operating income (loss) $ 35, 400 $ 30,100 $ 30,900 $ (25,600) * Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers…

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: Home Meals On House- keeping $ 924,000 $ 267,000 $ 405,000 $ 252,000 157,000 95,000 Total Nursing Wheels Revenues Variable expenses 477,000 447,000 115,000 152,000 205,000 200,000 Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* 69,200 42,500 115,300 184,800 411,800 8,400 20,200 40,200 40,200 7,200 38,800 20,600 15,100 36,300 53,400 122,200 81,000 167,200 50,400 122,400 Total fixed expenses Net operating income (loss) $ 35,200 $ 29,800 $ 32,800 $ ( 27,400) *Allocated on the basis of program revenues.