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

question 33

Essay

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?

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Definitions:

Compulsions

Actions or thoughts that a person compulsively repeats due to obsessions or strict guidelines.

Obsessions

Recurrent and persistent thoughts, impulses, or images that are intrusive and cause significant anxiety or distress.

Neutralizing

Attempting to eliminate thoughts that one finds unacceptable by thinking or behaving in ways that make up for those thoughts and so put matters right internally.

Cognitive-Behavioral Perspective

A psychological approach that emphasizes the role of thought processes and behaviors in understanding and treating mental disorders.