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Problem 13-9 |
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Sycamore Candy Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $3.10. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.85. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2014 and 2015 are as follows. (All purchases and sales are for cash.)
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2014 |
2015 |
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MP3 codes purchased |
315,000 |
415,800 |
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Candy bars sold |
2,959,600 |
2,776,000 |
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Wrappers redeemed |
1,512,000 |
1,890,000 |
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2014 wrappers expected to be redeemed in 2015 |
365,400 |
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2015 wrappers expected to be redeemed in 2016 |
441,000 |
Warning
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Premium Liability |
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Premium Expense |
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