Clarks Inc., a shoe retailer, sells boots in different styles. In early November
ID: 2455138 • Letter: C
Question
Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts selling “SunBoots” to customers for $70 per pair. When a customer purchases a pair of SunBoots, Clarks also gives the customer a 30% discount coupon for any additional future purchases made in the next 30 days. Customers can’t obtain the discount coupon otherwise. Clarks anticipates that approximately 20% of customers will utilize the coupon, and that on average those customers will purchase additional goods that normally sell for $100. I'm only having problem with question 1 and how many performance obligation are in a contact to buy a pair of sunboots?
Explanation / Answer
Details Amount Sales price of a "Sun Boot" 70.00 Value of Discount coupon 30% of future purchase Expected Utilisation % of discount 20% Expected Future purchase with in 30 days 100 Value of expected Discount utilization=100*30%*20% 6 Performance obligation in a contract to buy a pair of "sun Boots" 6