Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homeshome nursing, Meals on Wheels, and housekeeping. Revenue and expense data for the past year follow:

TotalHome NursingMeals on WheelsHousekeepingRevenues$ 916,000$ 262,000$ 403,000$ 251,000Variable expenses456,000111,000191,000154,000Contribution margin460,000151,000212,00097,000Fixed expenses:Depreciation69,7008,50041,00020,200Liability insurance43,90020,7007,50015,700Program administrators salaries115,80040,90038,70036,200General administrative overhead*183,20052,40080,60050,200Total fixed expenses412,600122,500167,800122,300Net operating income (loss)$ 47,400$ 28,500$ 44,200$ (25,300)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program.

The depreciation in housekeeping is for a small van 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 was dropped, but the liability insurance and the salary of the program administrator would be avoided.

Required:

1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program?

1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued?