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What amount should Funzy report as coupon promotion expense

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Reference no: EM133116605

Question - As part of a promotion campaign, Funzy Cereal Includes one coupon in each issue of various national magazines and offers a toy car in exchange for $1.10 and four coupons. The cars cost Funzy $1.60 each. Experience indicates that 40% of the coupons eventually will be redeemed. During the last month of 2021, the first month of the offer, 13.50 million coupons were distributed and 2.20 million of the coupons were redeemed. Funzy recognizes coupon promotion expense in the period coupons are issued. What amount should Funzy report as coupon promotion expense on its December 31, 2021, Income statement?

Reference no: EM133116605

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