A local dental practice decides to run a Groupon campaign. The campaign offered $350 worth of dental services (such as teeth whitening) for $135. For the total campaign, 260 coupons were sold. We estimate that 85% of the coupons will be redeemed, that 35% of the coupons will be redeemed by existing customers and that, on average, Groupon customers purchased 1.5 coupons. Let's assume that 24% of new customers come back after the Groupon coupon visit. The dental practice estimates its cost of goods sold to be 45%. Finally, the bill for the average Groupon customer was $390. The dental practice negotiated a 50/50 split with Groupon. Calculate the expenses of the Groupon campaign.
A local dental practice decides to run a Groupon campaign. The campaign offered $350 worth of dental services (such as teeth whitening) for $135. For the total campaign, 260 coupons were sold. We estimate that 85% of the coupons will be redeemed, that 35% of the coupons will be redeemed by existing customers and that, on average, Groupon customers purchased 1.5 coupons. Let's assume that 24% of new customers come back after the Groupon coupon visit. The dental practice estimates its cost of goods sold to be 45%. Finally, the bill for the average Groupon customer was $390. The dental practice negotiated a 50/50 split with Groupon. Calculate the expenses of the Groupon campaign.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A local dental practice decides to run a
Groupon campaign. The campaign offered
$350 worth of dental services (such as
teeth whitening) for $135. For the total
campaign, 260 coupons were sold. We
estimate that 85% of the coupons will be
redeemed, that 35% of the coupons will be
redeemed by existing customers and that,
on average, Groupon customers
purchased 1.5 coupons. Let's assume that
24% of new customers come back after
the Groupon coupon visit. The dental
practice estimates its cost of goods sold
to be 45%. Finally, the bill for the average
Groupon customer was $390. The dental
practice negotiated a 50/50 split with
Groupon.
Calculate the expenses of the Groupon
campaign.
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