Cumberland County Senior Services is a non-profit organization devoted to providing essentlal services to seniors who live in their own homes within the Cumberland County area. Three services are provided for seniors home nursing. Meais 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 meai once a day to each senior enroiled in the program. The housekeeping service provides weekly housecleaning and maintenance services Dota on revenue and expenses for the past year follow. "Allocated on the basis of program revenues The head administrator of Cumberland County Senior Services. Judih Ewa, is concerned about the organization's finances and: considers the operating income of $6.600 iast year to be razor thin. (Last year's resuits 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 fapid rate in order to prepare for the next inevitable recession, After seeing the above report, Ewa asked for more information about the financial advisability of discontinuing the housekeeping program The deprcciation in the housekeeping category is tor a small van that is used to carry the housekeepers and their equpment from job to job If the program were discontinued, the vat would be donated to a charitable organization. Depreciation charges assume zero salvage value None of the general administrative overhead would be avoided if the housekeeplng program were dropped, but the babily insurance and the salary of the program administrator would be avoided 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 $6,600 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 buliding its financiat reserves at a more rapid rate in order to prepare for the next inevitable recession. After seeing the above report, Ewa asked for more information about the financial advisability of discontinuing the housekeeping program. The depreciation in the housekeeping category 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. Depreciation charges assume zero salvage value. None of the general administrative overhead would be avolded if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avolded. 1-a. Compute the change in net operating income for the company as a whole if housekeeping program be discontinued. Required
