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 Nursing Meals On Wheels $ 404,000 House- keeping $ 256,000 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. Total $ 925,000 469,000 $ 265,000 113,000 202,000 154,000 456,000 152,000 202,000 102,000 69,400 8,400 40,500 20,500 43,900 20,500 7,600 15,800 115,600 40,600 38,500 36,500 185,000 53,000 80,800 51,200 413,900 122,500 167,400 124,000 $ 42,100 $ 29,500 $ 34,600 $ (22,000) The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $42,100 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 I 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 segmented income statement format be more useful to management in assessing the long-run financial viability of the various services?

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 Nursing Meals On Wheels $ 404,000 House- keeping $ 256,000 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. Total $ 925,000 469,000 $ 265,000 113,000 202,000 154,000 456,000 152,000 202,000 102,000 69,400 8,400 40,500 20,500 43,900 20,500 7,600 15,800 115,600 40,600 38,500 36,500 185,000 53,000 80,800 51,200 413,900 122,500 167,400 124,000 $ 42,100 $ 29,500 $ 34,600 $ (22,000) The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $42,100 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 I 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 segmented income statement format be more useful to management in assessing the long-run financial viability of the various services?

Administration Of Wills/Trusts/ And Estates

5th Edition

ISBN:9781285281308

Author:Brown

Publisher:Brown

Chapter9: Specialized Trusts

Section: Chapter Questions

Problem 2CTD

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