Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 64

A voluntary health and welfare organization sends a mailing to all of its members including those who have donated in the past and others who have never donated.The mailing, which cost $22,000, asks for monetary contributions to help achieve the organization's mission.In addition, 80 percent of the material included in the mailing is educational in nature, providing data about the organization's goals.Which of the following is true
a.Some part of the 522,000 should be reported as a program service cost because of the educational materials included.
b.No part of the $22,000 should be reported as a program service cost because there is no specific call to action.
c.No part of the $22,000 should be reported as a program service cost because the mailing was sent to both previous donors and individuals who have not made donations.
d.Some part of the $22,000 should be reported as a program service cost because more than 50 percent of the material was educational in nature.