(Not-for-profit, program, and support cost allocation) The Grand Rapids Opera Company is preparing a small pamphlet that will provide information on the types of opera, opera terminology, and storylines of some of the more well- known operas. In addition, there will be a request for funds to support the Opera Company at the end of the brochure. The company has tax-exempt status and operates on a not-for-profit basis.

The cost of designing and printing 100,000 copies of the pamphlet is $360,000. One page out of twelve is devoted to soliciting funding; however, 98% of the time spent in the design stage was on developing and writing the opera information.

a. If space is used as the allocation measure, how much of the pamphlet’s cost should be assigned to program activities? To support activities?

b. If design time is used as the allocation measure, how much of the pamphlet’s cost should be assigned to program activities? To support activities?LO1