In December,2016,Shooger Candy Company Began Including One Coupon in Each

question 62

Multiple Choice

In December,2016,Shooger Candy Company began including one coupon in each package of candy and offered customers a Stuffed Shooger Bear in exchange for $5 and five coupons.The stuffed bears cost Shooger $5.30 each.Eventually,it is expected that 40% of the coupons will be redeemed.During December,Shooger sold 280,000 packages of candy and no coupons were redeemed.In its December 31,2016 balance sheet,what amount should Shooger report as estimated liability for the coupons?

• A)$168,000
• B)$118,720
• C)$10,080
• D)$6,720

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Definitions:

MRP Curve

The marginal revenue product curve, which shows the additional revenue generated by one additional unit of an input.

Imperfectly Competitive Market

A market structure in which participants have some control over the prices because not all conditions of perfect competition are met, such as monopolistic competition and oligopoly.

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, where no single party can influence the market price.

Complementary Resource

A good or service that enhances the value or performance of another primary product or service.