Tiny Toons Distributes Cartoon DVDs That Sell for $12 Each

question 113

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 cash receipts for February?

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

---

Definitions:

Government

The organization, machinery, or agency through which a political unit exercises authority and performs functions and which is usually classified as democratic, authoritarian, etc.

Excise Tax

Excise tax is a type of tax charged on specific goods, services, and activities, such as alcohol, tobacco, and fuel, usually to discourage their use or generate revenue.

Consumers' Burden

The part of the incidence of a tax borne by consumers, often reflected in higher prices or reduced consumption of taxed goods.

Efficiency Loss

The reduction in economic productivity that happens when the balance for a product or service is either not attained or unattainable.