As Part of a Promotion Campaign, Funzy Cereal Includes One

question 26

Multiple Choice

As part of a promotion campaign, Funzy Cereal includes one coupon in each issue of various national magazines and offers a toy car in exchange for $1.00 and three coupons. The cars cost Funzy $1.50 each. Experience indicates that 4% of the coupons eventually will be redeemed. During the last month of 2018, the first month of the offer, 12 million coupons were distributed and 240,000 million of the coupons were redeemed. What amount should Funzy report as a promotional expense for coupons on its December 31, 2018, income statement?

• A) $0.
• B) $40,000.
• C) $80,000.
• D) $120,000.

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Definitions:

Autocratic Decision

A decision-making process where the leader makes decisions unilaterally without consulting others, often associated with a top-down approach.

Clear Goals

Well-defined, specific, and achievable objectives that guide actions and decision-making processes.

Ingratiation Tactic

A strategy where an individual attempts to influence another person by becoming more likeable to them, often through flattery or other forms of positive manipulation.

Coalition

An alliance or partnership formed between individuals or groups to achieve a specific purpose or undertake a collective action.