Exhibit 13-1 the Jung Company Includes a Premium in Each

question 17

Multiple Choice

Exhibit 13-1 The Jung Company includes a premium in each box of its cereal.For four premiums plus $2.00, customers are entitled to a plastic doll that costs Jung $4.50 each.Jung expects 60% of the premiums to be redeemed.In 2010, Jung sold 500, 000 boxes of cereal and distributed 25, 000 dolls.
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Refer to Exhibit 13-1.What is Jung's premium expense for 2010?

• A)$125, 000
• B)$187, 500
• C)$225, 000
• D)$337, 500

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Definitions:

Bed and Breakfast

A lodging establishment that offers overnight accommodation and breakfast, typically in a private home or small hotel.