Question
A bicycle retailer normally sells its R7 road bike for $2,600. The store is running a promotion. Each purchaser of an R7 will receive a
A bicycle retailer normally sells its R7 road bike for $2,600. The store is running a promotion. Each purchaser of an R7 will receive a coupon for 40% off the normal selling price of any other items in the store, up to a total of $1,200 per coupon. The coupon is good for six months. The retailer estimates that 80% of the customers purchasing an R7 will use the coupon to purchase additional goods that normally sell for $1,000 on average. What is the unit stand alone price of the coupon option to purchase additional goods, for purposes of step 4 of the 5 step revenue recognition model?
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