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- Nursing Wheels keeping Total Variable expenses Contribution margin Fixed expenses: $926,000 266,000 S 405,000 255,000 155,000 100,000 465,000 14,000 461,000 196,000 152,000209,000 40,600 7,800 39,000 81,000 168,400 8,900 Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses 70,100 44,000 115,000 185,200 414,300 $ 46,700 28,700 S 40,600 $ (22,600) 20,600 15,600 35,400 51,000 122,600 20,600 40,600 53,200 123,300 Net operating income (loss) 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 $46,700 last year to be razorthin. (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