Star Wars Cereal started a program at the beginning of 2021 in which it would provide a figurine of Baby Yoda in exchange for four proof-of-purchase box tops. Star Wars Cereal estimates that 40% of box tops will be redeemed. The Baby Yoda figurines cost Yummy Rice $1.20 each. In 2021, 5,480,000 boxes of cereal were sold. By year-end 912,000 box tops had been redeemed.
Required:
Calculate the premium expense that Star Wars Cereal should recognize for the year ended December 31, 2021.