Jackson County Senior Services is a nonprofit organization devoted to providing
ID: 2444019 • Letter: J
Question
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. 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:
414,300
140,900
192,100
81,300
175,700
50,000
79,200
46,500
$22,000
$25,400
$31,000
$(34,400)
The head administrator of Jackson County Senior Services, Judith Miyama, is concerned about the organization's finances and considers the net operating income of $22,000 last year to be razor-thin. (Last year's results were very similar to the results for previous years and are representative of what would be expected in the future.) She feels that the organization should be building its financial reserves at a more rapid rate in order to prepare for the next inevitable recession. After seeing the above report, Ms. Miyama asked for more information about the financial advisability of perhaps discontinuing the housekeeping program.
The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided.
What is the amount of the change in net income if the housekeeping unit is dropped? (Input the amount as positive value. Omit the "$" sign in your response.)
Recast the above data in a format that would be more useful to management in assessing the long-run financial viability of the various services. (Enter all amounts as positive numbers except for Net Operating Income which should be indicated by a minus sign if the result is a loss. Omit the "$" sign in your response.)
$
$
$
$
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. 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:
Explanation / Answer
What is the amount of the change in net income if the housekeeping unit is dropped? (Input the amount as positive value. Omit the "$" sign in your response.)
Total Contribution ($140,900 + $192,100) $333,000
Less: Fixed costs
Home Nursing $115,500
Meals on wheels $161,100
Housekeeping $46,500
(unavoidable) ___________ $323,100
Net Operating Income $9,900
Existing Net opearting Income $22,000
Decrease in Net operating Income $12,100
What is the amount of the change in net income if the housekeeping unit is dropped? (Input the amount as positive value. Omit the "$" sign in your response.)
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