Simulation #$1-$Functional Expense Allocation

Using the following facts, calculate the total program, management and general and fundraising expenses that should be reflected on the Organization's statement of activities for the following expenditures. Please show arny supporting calculations for partial credit.

$1)$ The Organization's total salary costs is comprised of:

a$)$ $$150,000$ for the Executive Director. Per a time study, the Executive Director spends $30\%$ of her time directly conducting program activities, $20\%$ of her time directly supervising program employees, $5\%$ of her time managing the organization's various government grants and contracts, $10\%$ of her time assisting the Human Resources Director with managing staffing and human resources, $20\%$ of her time performing fundraising activities, and $15\%$ of her time performing administrative functions.

b$)$ Two program directors who are paid $$60,000$ and $$85,000,$ respectively, Per a time study, the program director that was paid $560,000$ spends $80\%$ of their time directly conducting program activities. $15\%$ of their time managing a government grant supporting the program, and $5\%$ of their time on administrative functions. Per a time study, the program directors that was paid $$85,000$ spends $50\%$ of their time directly conducting program activities, $20\%$ directly supervising program employees, $20\%$ of their time on administrative functions and $10\%$ of their time assisting the Development Director with the organization's largest fundraising event.

d$)$ $$130,000$ for a Development Director. Per a time study, he spends $70\%$ of his time soliciting grants and other contributions, $20\%$ of his time planning fundraising events, $55\%$ of his time reporting on the outcomes of the government grants received $($which the Organization considers to be crucial to fulfilling the organization's mission$)$ and $5\%$ generating the Organization's annual report for donors and other supporters.

d$)$ $$70,000$ for a Human Resources Director. Per a time study, she spends $65\%$ indirectly assisting program employees, $20\%$ indirectly assisting development employees, and $15\%$ indirectly assisting administrative employees.

e$)$ $$50,000$ for a Volunteer Coordinator. Per a time study, she spends $65\%$ of his time recruiting volunteers to assist with both programmatic and fundraising activities, $25\%$ directly supervising them conducting program activities and $10\%$ directly supervising them conducting special event and fundraising activities.

fj $$115,000$ for a CFO. Per a time study, he spends $20\%$ of his time processing payroll, $30\%$ of his time reconciling contribution revenue, $15\%$ of his time reconciling government grant revenue, $15\%$ of his time providing the financial elements for the various grant reports, $10\%$ of his time reconciling and monitoring the organization's investment portfolio, $5\%$ performing general recordkeeping and $5\%$ preparing the organization's annual budget.

$2)$ $$16,000$ of advertising costs, which consist of $$6,000$ of advertising costs to encourage patrons to buy tickets to the Organization's annual theatrical program and $$10,000$ to encourage patrons to attend the Organization's special events

$3)$ Three fundraising events are held during the year one peripheral, incidental events that cost $$5,000$ as well as two major, ongoing events that costs $560,000$ and

$$45,000,$ respectively

$4)$ Occupancy and general office expenses of $$110,000.$ The Organization has analyzed the square footage of their facility and determined that $10\%$ of the space is used by the Executive Director and $5\%$ of the space is used by each of the following employees: the Human Resources Director, the Development Director, the Volunteer

Coordinator and the CFO. The remaining $70\%$ is used by the Program Directors. The Organization has elected to further allocate these cost based on how the employees using their respective space spent their time.

Salary Allocation:

Executive Director

Program Directors

Development Director

Human Resource Director

Volunteer Coordinator

CFO

TOTAL

STATEMENT OF FUNCTIONAL EXPENSES:

Management & General

Program

Fundraising

Total

Salary costs

Advertising

$/6$ points

$/1$ point

Fundraising events

$/1$ point

Occupancy and general office expenses

TOTAL

$/11$ points

Program

Management &

General

Fundraising

TOTAL

$(1$ point each$)$

$(1$ point each$)$

$(1$ point each$)$

$(1$ point each$)$

$(1$ point each$)(1$ point each$)$

Occupancy and General Office Expenses Allocation:

Program

Management &

General

Fundraising

TOTAL

Executive Director

Program Directors

$(0\mathrm{.}5$ points each$)$

$(0\mathrm{.}5$ points each$)$

$(0\mathrm{.}5$ points each$)$

$(0\mathrm{.}5$ points each$)(0\mathrm{.}5$ points each$)$

$/3$ pointa

Development Director

Human Resource Director

Volunteer Coordinator

CFO

TOTAL

$(0\mathrm{.}5$ points each$)$