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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

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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 ear follow for the past Home Meals On House- keeping $ 918,000 S 264,000 $ 401,000 253,000 478,000 119,000 203,000 156,000 Total Nursing Wheels Revenues Variable expenses Contribution margin Fixed expenses 440,000 145,000 98,000 97,000 69,300 43,200 20,500 Depreciation Liability insurance Program administrators' salaries 115,300 40,700 38,100 36,500 General administrative overhead 183,600 52,800 80,200 50,600 9,00040,200 20,100 7,400 15,300 Total fixed expenses 411,400 123,000 165,900 122,500 Net operating income (loss) $ 28,600 S 22,000 S 32,100 $ (25,500) 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 $28,600 last year to be razor-thin. (Last year's results were very similar t 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 o the results fo r previous years and are representative of what would be The depreciation in housekeeping is for a small van that is used to carry 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 the housekeepers and their Required: 1-a. What is the impact on net operating income by discontinuing housekeeping program

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