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) Meals on Wheels $ 407,000 Total $ 926,000 466,000 Home Nursing $ 268,000 111,000 Housekeeping $ 251,000 460,000 157,000 196,000 211,000 159,000 92,000 70,300 8,700 41,000 20,600 43,700 20,300 7,600 15,800 116,100 40,600 38,500 37,000 185,200 53,600 81,400 50,200 415,300 123,200 168,500 123,600 $ 44,700 $ 33,800 $ 42,500 $ (31,600) *Allocated on the 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? 1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? Complete this question by entering your answers in the tabs below. Required 1A Required 1B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Financial (disadvantage)
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) Meals on Wheels $ 407,000 Total $ 926,000 466,000 Home Nursing $ 268,000 111,000 Housekeeping $ 251,000 460,000 157,000 196,000 211,000 159,000 92,000 70,300 8,700 41,000 20,600 43,700 20,300 7,600 15,800 116,100 40,600 38,500 37,000 185,200 53,600 81,400 50,200 415,300 123,200 168,500 123,600 $ 44,700 $ 33,800 $ 42,500 $ (31,600) *Allocated on the 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? 1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? Complete this question by entering your answers in the tabs below. Required 1A Required 1B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Financial (disadvantage)
Chapter15: Choice Of Business Entity—other Considerations
Section: Chapter Questions
Problem 71P
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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)
Meals on
Wheels
$ 407,000
Total
$ 926,000
466,000
Home
Nursing
$ 268,000
111,000
Housekeeping
$ 251,000
460,000
157,000
196,000
211,000
159,000
92,000
70,300
8,700
41,000
20,600
43,700
20,300
7,600
15,800
116,100
40,600
38,500
37,000
185,200
53,600
81,400
50,200
415,300
123,200
168,500
123,600
$ 44,700
$ 33,800
$ 42,500 $ (31,600)
*Allocated on the 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?
1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A,
should the Housekeeping program be discontinued?
Complete this question by entering your answers in the tabs below.
Required 1A Required 1B
What is the financial advantage (disadvantage) of discontinuing the Housekeeping program?
Financial (disadvantage)
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