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 fo year follow: Home Meals On House. Total Nursing Wheels keeping Revenues 929,000 268,000 410,000 251,000 Variable expenses 470,000 115,000 201.000 154,000 Contribution margin 459,000 153,000 209,000 97,000 Fixed expenses: Depreciation 69,400 8,700 40,300 20,400 Liability insurance 44,200 21.000 8.000 15,200 Program administrators' salaries 113,700 40.400 38,100 35,200 General administrative overhead 185,800 53,600 82,000 50,200 Total fixed expenses 413,100 123,700 168.400 121,000 Net operating income (loss) 45,900 29,300 40,600 (24,000) "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 $45,900 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 smal 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