Get-Up-N-Go! is a not-for-profit organization with a mission of improving the quality of life for senior citizens; one objective within that mission is to increase seniors’ physical activity. One four-page brochure distributed to over-65ers uses the first two pages to discuss a self-supervised exercise program and to encourage the undertaking of such a program. The remaining two pages of the brochure explain the Get-Up-N- Go! program and solicit contributions. Production of this brochure costs $ 10,000. A second four- page brochure provides specific information on exercise techniques for seniors; no contribution requests are made. Development and production of this brochure cost $ 14,000. The brochures are distributed to people over 65, regardless of their ability to contribute, and were developed by a public relations firm that was aware of the objectives of Get-Up-N-Go! through a letter requesting the help of the PR firm.
a. How much, if any, of the brochure costs should be considered allocable? Explain your reasoning.
b. If you have determined that any of the brochure costs should be allocated, should the allocation be to fund-raising, program, or administrative functions? How would you allocate the joint cost?
c. How, if at all, would your answer change if Get-Up-N-Go! employs a fund- raising consultant to develop the first brochure and pays that consultant 30 percent of the contributions received?

  • CreatedJune 03, 2014
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