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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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