Tiny Toons Distributes Cartoon DVDs That Sell for $12 Each

question 118

Multiple Choice

Tiny Toons distributes cartoon DVDs that sell for $12 each. Tiny Toons pays $7 per DVD to buy the product. Selling costs of $1 per unit are incurred to deliver the DVDs to the customer. This is paid in cash when the product is sold. Tiny Toons has $50,000 per month in fixed selling and administrative expenses (including $3,000 in depreciation) , which are paid half in the month incurred and half in the next month. It is Tiny's policy to maintain an inventory at the end of each month equal to 30% of the next month's projected unit sales.
Tiny Toons makes 30% of sales in cash, and the remainder are on credit. Credit sales are collected in the month after sale. Budgeted monthly sales for the first five months of 2014 are: $$\begin{array} { l l } \text { January } & 20,000 \text { units } \\\text { February } & 22,000 \text { units } \\\text { March } & 26,000 \text { units } \\\text { April } & 28,000 \text { units } \\\text { May } & 40,000 \text { units }\end{array}$$
How much are budgeted cash receipts for February?

• A) $22,000
• B) $79,200
• C) $264,000
• D) $247,200

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Definitions:

Null Hypothesis

A default hypothesis that there is no effect or no difference, and any observed effect is due to sampling error.

Alcohol-Related Problems

Issues arising from the consumption of alcohol that affect an individual's health, social life, or legal status.

Analytical Comparison

The process of examining and evaluating similarities and differences between entities or datasets using analytical methods.

Familywise Error

Familywise error rate is the probability of making one or more false discoveries, or type I errors, when performing multiple hypotheses tests.