Business Notes TELEVISION

Nothing infuriates critics of children's TV more than cartoon shows that are produced or partly financed by toy manufacturers. Mattel, for example, used He-Man and the Masters of the Universe to help sell an estimated $175 million worth of toys last year, while Hasbro's Transformers helped generate sales of $214 million. Under President Reagan, the Federal Communications Commission has removed all limits on advertising in children's programming and refused to take action against shows that detractors call "program-length commercials."

Now activist groups, including Action for Children's Television, have mounted a serious court challenge to the FCC. In two rulings, the second of which came last week, federal judges in Washington have ordered the FCC to justify its policy or come up with new guidelines on the commercial content of children's TV.