Question: 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


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: Meals On House- Total Home Nursing wheels keeping Revenues $ 918,999 $ 263,666 $ 492,999 $ 253,999 Variable expenses 475,666 117,666 262,666 156,666 Contribution margin 443,666 146,666 266,666 97,666 Fixed expenses: Depreciation 69,466 8,566 49,599 29,499 Liability insurance 43,666 26,566 7,766 15,466 Program administrators' salaries 115,166 46,166 38,366 36,766 General administrative overhead* 183,666 52,666 86,466 56,666 Total fixed expenses 411,766 121,766 166,966 123,166 Net operating income (loss) 35 31,366 $ 24,366 $ 33,166 $ (26,166) *Allocated on the basis of program revenues, The head administrator ofJackson County Senior Services, Judith Miyama, considers last year's net operating income of $31,300 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping program. The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment fromjob tojob. 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 ofthe program administrator would be avoided. 1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program
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