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Asus Corporation began a special promotion in July 2011 in an attempt to increase sales. A coupon was placed in each box of product which sold at $10 each. Customers could send in 5 coupons for a free prize. Each prize cost Asus Corporation $3.00. Asus's management estimated that 80% of the coupons would be redeemed. For the six months ended December 31,2011, the following information is available: Prizes Purchased 35,000 Prize Product Sold 200,000 Boxes Coupons redeemed During 2011 56,000 Coupons
Required:
Question a. Determine the estimated Premium Expenses assuming that the actual redemption were incurred during 2011.
Question b. Calculate the estimated Premium Expenses assuming that the actual redemption were incurred during 2012 instead of 2011
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