Barlo Lunch Snacks Places a Coupon in Each Box of Its

Multiple Choice

Barlo Lunch Snacks places a coupon in each box of its cracker product. Customers may send in five coupons and $3, and the company will send them a recipe book. Sufficient books were purchased at a cost of $5 each. A total of 500,000 boxes of product were sold in 2014. It was estimated that 4% of the coupons would be redeemed. During 2014, 9,000 coupons were redeemed. What is Barlo's premium expense for 2014?

A) $ 4,400
B) $ 8,000
C) $20,000
D) $40,000