Debra's Diabetes Foundation was started by a family whose mother had died after suffering for many years with diabetes. A lecture that cost the foundation $360,000 was held on the fourth Tuesday in March, which is American Diabetes Alert Day. Advertisements were placed in all local newspapers and were broadcast on local media channels. During the lecture, information was provided about the causes, symptoms, and treatment of diabetes, about help available for caregivers, and about the foundation and its mission. In addition to requesting contributions, members of the foundation asked attendees to take a quiz about diabetes, volunteer to distribute pamphlets about the disease to local businesses, write letters to their insurance companies about additional coverage availability, and participate in the Medicare Advocacy Program to gather information and identify problems encountered by beneficiaries and providers.

a. Did the lecture meet the audience criterion? Why or why not?

b. Did the lecture include a call for action? Explain.

c. Assume that 65 percent of the lecture time was related to the disease, 25 percent of the lecture was related to the foundation, and 10 percent was related to fund-raising.

Allocate the joint cost to the three activities.

d. Assume that the topics discussed at the lecture were not in specific order and, often, discussion was in response to questions that were asked by the attendees. How else might the joint cost be allocated among program, management, and fund-raising activities?

e. Debra's Diabetes Foundation hired a consultant to help with the lecture. The consultant was paid $40,000 but has been informed that, if the lecture raises between $400,001 and $500,000, the fee would increase to $50,000; if the lecture raises over $500,000, the consultant would be paid $70,000. The consultant's fee was not included in the $360,000 joint cost. The Foundation was excited to find that the lecture raised $540,000. The time allocation given in (c) was representative of the time spent on topics during the lecture. How much of the $430,000 ($360,000 + $70,000) should be allocated to the three activities?