Cumberland County Senior seniors who live in their own homes within the Cumberla

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Cumberland County Senior seniors who live in their own homes within the Cumberland area. Three services are provided for nurses visit me nursing, Meals on Wheels, and housekeeping. In the home nursing program, 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: Home Total 592,600 145,200 255,000 192,400 469,400 161,600 217,000 90,800 Re $1,062,000 $306,800 $472,000 $283,200 Variable expenses Contribution margin Fixed expenses: 74,840 9,440 42,700 22,700 48,660 22,700 8,800 17,160 126,700 44,500 40,700 41,500 212.400 61,360 94,400 56,640 Program administrators' salaries Total fixed expenses 462,600 138,000 186,600 138,000 Operating income (loss) 6,800 23,600 30,400 (47,200) Allocated on the basis of program revenues. The head administrator of Cumberland County Senior Se organization's finances and considers the results were very similar to the results for previous years and are 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 re information about the financial advisability of discontinuing the housekeeping income of $6,800 last year to be razor-thin. (Last year's of what would be expected cession. After seeing the above report, Ewa asked for more The depreciation in the housekeeping category is for a small van that is used to carry the and their equipment from job to job. If the program were di charitable organization. Depreciation charges assume zero salvage value. None of the general d would be avoided if the insurance and the salary of the program administrator would be avoided Required:

Explanation / Answer

1- a)

If housekeeping is closed then

Decrease in Net Operating Income by 32,140

1-b) Housekeeping program should not be discountinued as it will result in Decrease in Net operating income of the company as a whole.

1-c) Yes

Contribution Lost 90,800 (-) Liability Insurance avoided 17,160 (-) Program administrators' salaries avoided 41,500 Net Contribution lost 32,140

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