Total		Home Nursing		Meals On Wheels		House- keeping
Revenues	$	923,000	$	263,000	$	405,000	$	255,000
Variable expenses		467,000		116,000		197,000		154,000
Contribution margin		456,000		147,000		208,000		101,000
Fixed expenses:
Depreciation		70,000		8,300		40,800		20,900
Liability insurance		43,800		20,400		8,000		15,400
Program administrators salaries		115,300		40,200		39,000		36,100
General administrative overhead*		184,600		52,600		81,000		51,000
Total fixed expenses		413,700		121,500		168,800		123,400
Net operating income (loss)	$	42,300	$	25,500	$	39,200	$	(22,400)

*Allocated on the basis of program revenues.

The head administrator is concerned about the organizations finances and considers the net operating income of $42,300 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.

Required:

Whats the impact of housekeeping on net operating income?

		Total If	Difference: Net Operating
	Current Total	Housekeeping Is Dropped	Income Increase or (Decrease)
Revenues
Variable expenses
Contribution margin	0	0	0
Fixed expenses:
Depreciation
Liability insurance
Program administrators salaries
General administrative overhead
Total fixed expenses	0	0	0
Net operating income (loss)	$0	$0	$0

Should housekeeping operations be continued?