Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who live in their own homes within the Cumberland County area. Three services are provided for seniors-home nursing, Meals on Wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals on Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. 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 Operating income (loss). Total $1,062,000 592, 600 469,400 $ 74,840 48,660 126,700 212,400 462,600 6,800 Home Nursing $306,800 145,200 161,600 9,440 22,700 44,500 61,360 138,000 $ 23,600 Meals on Wheels $472,000 255,000 217,000 42,700 8,800 40,700 94,400 186, 600 $ 30,400 House- keeping $283,200 192,400 90,800 22,700 17,160 41,500 56,640 138,000 $(47,200) *Allocated on the basis of program revenues. The head administrator of Cumberland County Senior Services, Judith Ewa, is concerned about the organization's finances and considers the operating income of $6,800 last year to be razor-thin. (Last year's results were very similar to the results for previous years and are representative of what would be expected in the future.) She feels that the organization should be building its financial
Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who live in their own homes within the Cumberland County area. Three services are provided for seniors-home nursing, Meals on Wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals on Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. 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 Operating income (loss). Total $1,062,000 592, 600 469,400 $ 74,840 48,660 126,700 212,400 462,600 6,800 Home Nursing $306,800 145,200 161,600 9,440 22,700 44,500 61,360 138,000 $ 23,600 Meals on Wheels $472,000 255,000 217,000 42,700 8,800 40,700 94,400 186, 600 $ 30,400 House- keeping $283,200 192,400 90,800 22,700 17,160 41,500 56,640 138,000 $(47,200) *Allocated on the basis of program revenues. The head administrator of Cumberland County Senior Services, Judith Ewa, is concerned about the organization's finances and considers the operating income of $6,800 last year to be razor-thin. (Last year's results were very similar to the results for previous years and are representative of what would be expected in the future.) She feels that the organization should be building its financial
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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