Mount Snow operates a Rocky Mountain resort. The company is planning is ticket pricing for the coming skisson Investors would like to com a 17% rotum on the company's $105 milion of assets. The company incurs primarily fred costs to groom the nuns and operate the tits Mount Snow projects fred costs to be 536,600,000 for the season. The resort serves 825,000 skiers and snowboarders each session Variable costs we sa per guest Currently, the resort has such a favorable reputation among skers and snowboarders that it has some control over the interio 1. Would Mount Snow emphasize target conting or cont plus pricing. Why? If other resorts in the area charge 567 per day, what price should Mount Snow charge? 2 1. Would Mount Browerphasise target costing or cost pus prion Why? Mount Snow should emphasize a col plus approach to pricing because has been able to differentiate its ski resort from others in the area. Because of its favorable reputation, managers with some control over pricing. Of course, they will need to consider whether the coole prices within the range oomers are willing to pay 2. other resorts in the area charge 67 per day. what price to our new charge? Complete the following table to calculate the price Mount Snow should charge. (Round your answer to the nearest cant) Pus Plus Target revenue Divided by Price per in ticket 3 of 3 complete HW Score: 6.67%, 1.33 of 20 S8-3 (similar to) Question Help WinterDream operates a Rocky Mountain ski resort. The company is planning is it sicket pricing for the coming ski season. Investors would be to eam a 19% return on the company's $110 milion of assets. The company incurs primary and costs to groom the runs and operate the lifts Winter Dream projects fixed costs to be $37,200,000 for the season. The resort serves about 830.000 skiers and snowboarders each season. Variable costs are 512 per guest. The resort had such a favorable reputation among skers and snowboarders that it had some control over the lit ticket prices Assume that Winter Dean's reputation has diminished and other resorts in the vicinity are charging only to per inicket Winter Dream has become a price-taker and won't be able to charge more than its competitors. At the market price WinterDream's managers believe they will still serve 830,000 skiers and snowboarders each season Read the requirements 1. Winter Dream can't reduce its costs, what profit will team? State your answer in dollars and as a percent of assets. Wil investors be happy with the profit level? Show your analysis Complete the following table to calculate Winter Dream's projected income and excess profit or shorta. (Ute parentheses or a minus sign to show a profit shortfal.) Revenue at market price Less: Total costs Operating income Compared to the desired operating income of Expected excess profit profit shortfill) Requirements - X 1. If WinterDream can't reduce its costs, what profit will it earn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Show your analysis. 2. Assume that Winter Dream has found ways to cut its fixed costs to $26.41 million. What is its new target variable cost per skier/snowboarder? Compare this to the current variable cost per skier/snowboarder. Comment on your results. Print Done Nature Place operates a commercial plant nursery where it propagatos plants for garden centers throughout the region. Nature Place has a million in . Is yearly found costs are $500,000, and the variable costs for the potting sol container, label, soeding, and labor for each gallon-sized pianto 1.15. Nature Place's volume is current 480.000 Competitors offer the same quality plants to garden centers for $3.40 each Garden centers then mark them up to set the public for $8 to $11. depending on the type of plant Read the requirements Requirement 1. Nature Place owners want to com a 19mm on the company's What is Nature's a low? Calculate the target full cost for Nature Place Select the formula labels and enter the amounts Revenue at current market price Target mula lat * Requirements 1. Nature Place owners want to earn a 13% return on the company's assets. What is Nature Place's target full cost? 2. Given Nature Place's current costs, will its owners be able to achieve their target profit? Show your analysis. 3. Assume that Nature Place has identified ways to cut its variable costs to $1.00 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit? Show your analysis. 4. Nature Place started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Nature Place doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Nature Place has to spend $120,000 this year to advertise and its variable costs continue to be $1.00 per unit, what will its cost-plus price be? Do you think Nature Place will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Print Done