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 Meals On House Tota Nursing Wheels keeping 7,000 263,000 408,000 256,000 Revenues 475,000 114,000 206,000 155,000 Variable expenses Contribution margin 452,000 149,000 202,000 101,000 Fixed expenses: Depreciation 8,200 40,800 20,500 69,500 Liability insurance 44,000 20.500 7,800 15,700 Program administrators' salaries 115,900 38,800 36,200 0.900 81,600 51,200 General administrative overhead* 185,400 52,600 Total fixed expenses 414,800 122,200 169,000 123,600 Net operating income (loss) 37,200 26,800 33,000 (22,600) Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, is concerned about the organization's finances and considers the net operating income of $37,200 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