In an effort to increase sales, Rofix Company began a sales promotion campaign on June 30, 2011. Part of this promotion included placing a special coupon in each package of candy bars sold. Customers were able to redeem ten coupons for a Frisbee. Each premium costs Rofix $1.50. Rofix estimated that 60 percent of the coupons issued will be redeemed. For the six months ended December 31, 2011, the following information is available:

What is the estimated liability for premium claims outstanding at December 31, 2011?

Question

In an effort to increase sales, Rofix Company began a sales promotion campaign on June 30, 2011. Part of this promotion included placing a special coupon in each package of candy bars sold. Customers were able to redeem ten coupons for a Frisbee. Each premium costs Rofix $1.50. Rofix estimated that 60 percent of the coupons issued will be redeemed. For the six months ended December 31, 2011, the following information is available:
  
What is the estimated liability for premium claims outstanding at December 31, 2011?

Quizplus · Accepted Answer

The Answer of In an effort to increase sales, Rofix Company began a sales promotion campaign on June 30, 2011. Part of this promotion included placing a special coupon in each package of candy bars sold. Customers were able to redeem ten coupons for a Frisbee. Each premium costs Rofix $1.50. Rofix estimated that 60 percent of the coupons issued will be redeemed. For the six months ended December 31, 2011, the following information is available:
  
What is the estimated liability for premium claims outstanding at December 31, 2011?

In an Effort to Increase Sales, Rofix Company Began a Sales