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- Wheels keeping $ 928,000 $ 268,000 $ 406,000 $ 254,000 481,000 112,000 209,000 160,000 Total Nursing Revenues Variable expenses Contribution margin Fixed expenses: 47,000 156,000 197,000 94,000 Depreciation Liability insurance Program administrators' salaries General administrative overhead 21.000 15,900 35,800 185,600 53,600 81,200 50,800 8,600 40,300 7.600 41,000 39,000 69,900 43,70020,200 Total fixed expenses 415,000 123,400 168,100 123,500 Net operating income (loss) S 32,000 S 32,600 $ 28,900 $ (29,500) 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 S32,000 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 t 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 he program were discontinued, the van would be donated to a charitable