Every Halloween, Petersons Ice Cream Shop offers a trick$-$or$-$treat package of $25$ coupons for $$20.$ The coupons are redeemable by children $12$ years or under, for a single$-$scoop cone, with a limit of one coupon per child per visit. Coupon sales average $660$ books per year. The printing costs are $$82\mathrm{.}50.$ A single$-$scoop cone of Petersons ice cream normally sells for $$2\mathrm{.}00.$ The variable costs of a single$-$scoop cone are $$1\mathrm{.}50.$ 

 

Required

a$.$ Determine the loss if all coupons are redeemed without any other effect on sales.

Note: Round your answer to the nearest whole dollar.

$Answer

b$.$ Assume all coupons will not be redeemed. With regular sales unaffected, determine the coupon redemption rate at which Petersons will break even on the offer.

Note: Round your answer to the nearest full percentage point.

Answer

$0$

$\%$

c$.$ Assuming regular sales are not affected and one additional single$-$scoop cone is sold at the regular price each time a coupon is redeemed, determine the coupon redemption rate at which Petersons will break even on the offer.

Note: Round your answer to the nearest full percentage point.

Answer

$0$

$\%$

d$.$ Determine the profit or loss incurred on the offer if the coupon redemption rate is $60\%$ and:

$1.$ One$-$fourth of the redeemed coupons have no effect on sales.

$2.$ One$-$fourth of the redeemed coupons result in additional sales of two single$-$scoop cones.

$3.$ One$-$fourth of the redeemed coupons result in additional sales of three single$-$scoop cones.

$4.$ One$-$fourth of the redeemed coupons come out of regular sales of single$-$scoop cones

Note: Round your answer to the nearest whole dollar.

$Answer

$0$

Answer rating: 100% (QA)

a To determine the loss if all coupons are redeemed without any other effect on sales we need to calculate the total cost of the redeemed coupons and compare it to the revenue generated The cost of pr... View the full answer