Tiny Toons Distributes Cartoon DVDs That Sell for $12 Each

question 112

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 2017 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 inventory purchases during February?

• A)$154,000
• B)$23,200
• C)$162,400
• D)$54,600

---

Definitions:

Norm Groups

Reference groups used in psychological testing to establish norms or average scores against which individual test scores can be compared.

Program Evaluation

Program evaluation is the systematic collection of information about the activities, characteristics, and outcomes of programs to make judgments about the program, improve its effectiveness, and/or inform decisions about future programming.

Significance

The quality of being worthy of attention; importance.

Environmental Conditions

Refers to the physical and biological factors along with their chemical interactions that affect an organism or a group of organisms.