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 seniorshome nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow:

		Total		Home Nursing		Meals On Wheels		House- keeping
Revenues	$	935,000	$	267,000	$	410,000	$	258,000
Variable expenses		467,000		113,000		201,000		153,000
Contribution margin		468,000		154,000		209,000		105,000
Fixed expenses:
Depreciation		69,500		8,400		40,800		20,300
Liability insurance		43,900		20,500		7,900		15,500
Program administrators salaries		115,000		40,600		38,000		36,400
General administrative overhead*		187,000		53,400		82,000		51,600
Total fixed expenses		415,400		122,900		168,700		123,800
Net operating income (loss)	$	52,600	$	31,100	$	40,300	$	(18,800)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, is concerned about the organizations finances and considers the net operating income of $52,600 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 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.

Required: 1-a. What is the impact on net operating income by discontinuing housekeeping program? (Decreases should be indicated by a minus sign. Difference: Net Total If Operating Housekeeping Income Increase Current Total s Dropped or (Decrease) Revenues Variable expenses 0 0 0 Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead 0 0 0 Total fixed expenses S 0 0 0 Net operating income (loss)