ABC Company includes 1 coupon in each box of coffee it sells. A planner is offered as a premium to customers who send in 10 coupons and a remittance of P10. Distribution cost of premium is P5. Experience indicates that only 30% of the coupons will be redeemed. Boxes of coffee sold: 2022 - 800,000; 2023 - 1,000,000 No. of planners purchased at P150 each: 2022 - 20,000; 2023 - 32,000 Coupons redeemed: 2022 - 160,000; 2023 - 280,000 What is the premium expense for 2022
ABC Company includes 1 coupon in each box of coffee it sells. A planner is offered as a premium to customers who send in 10 coupons and a remittance of P10. Distribution cost of premium is P5. Experience indicates that only 30% of the coupons will be redeemed. Boxes of coffee sold: 2022 - 800,000; 2023 - 1,000,000 No. of planners purchased at P150 each: 2022 - 20,000; 2023 - 32,000 Coupons redeemed: 2022 - 160,000; 2023 - 280,000 What is the premium expense for 2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Company includes 1 coupon in each box of coffee it sells. A planner is offered as a premium to customers who send in 10 coupons and a remittance of P10.
Distribution cost of premium is P5. Experience indicates that only 30% of the coupons will be redeemed.
Boxes of coffee sold: 2022 - 800,000; 2023 - 1,000,000
No. of planners purchased at P150 each: 2022 - 20,000; 2023 - 32,000
Coupons redeemed: 2022 - 160,000; 2023 - 280,000
What is the premium expense for 2022?
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