Multiple Choice
A cereal company includes one premium coupon in every cereal box.Upon returning 10 such coupons to the company, a customer will be sent a free cereal bowl.In a recent year, the company sold 200,000 boxes of cereal for $1 a box.It is estimated that 20% of the coupons will be returned.If the cereal bowls cost the company $3 each, what amount of liability for premium redemptions must be recorded by the company?
A) $6,000
B) $12,000
C) $24,000
D) $200,000
Correct Answer:
Verified
Correct Answer:
Verified
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