Grand Chalets operates a Rocky Mountain ski resort. The company is planning its lift-ticket pricing for the coming ski season. Investors would like to earn a 17% return on the company's $115 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. Grand Chalets projects fixed costs to be $35,000,000 for the ski season. The resort serves about 900,000 skiers and snowboarders each season. Variable costs are about $11.50 per guest. Currently, the resort has such a favourable reputation among skiers and snowboarders that it has some control over the lift-ticket prices. 1. Would Grand Chalets emphasize target costing or cost-plus pricing? Why? 2. If other resorts in the area charge $68 per day, what price should Grand Chalets charge? 1. Would Grand Chalets emphasize target costing or cost-plus pricing? Why? Grand Chalets should emphasize a approach to pricing because it has been able to differentiate its ski resort from others in the area. control over pricing. Of course, they still need to consider whether the Because of its favourable reputation, managers will have price is within the range customers are willing to pay. 2. If other resorts in the area charge $68 per day, what price should Grand Chalets charge? Complete the following table to calculate the price Grand Chalets should charge. (Round your final answer to the nearest dollar.) Total variable costs 10,350,000 35,000,000 Plus: Fixed costs Total costs 45,350,000 19,550,000 Plus: Target revenue Target revenue Divided by: Price per lift ticket If other resorts in the area charge $68 per day, what price should Grand Chalets charge? The price is $ competing ski resorts in the area. Given Grand Chalets' favourable reputation, it