Mount Snow 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 15% return on investment on the company's $135,000,000 of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. Mount Snow projects fixed costs to be $36,000,000 for the ski season. The resort serves about 750,000 skiers and snowboarders each season. Variable costs are about $13 per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices. Read the requirements. Requirement 1. Would Mount Snow should em some control over pri Requirement 2. If othe Complete the following Requirements 1. Would Mount Snow emphasize target pricing or cost-plus pricing? Why? 2. If other resorts in the area charge $84 per day, what price should Mount Snow charge? - ers in the area. Because of its good reputation, managers will have e willing to pay. Fixed costs Plus: Total variable c Total costs Plus: Desired profit Target revenue Divided by: Number of skiers / snowboarders Price per lift ticket Print Done Mount Snow 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 15% return on investment on the company's $135,000,000 of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. Mount Snow projects fixed costs to be $36,000,000 for the ski season. The resort serves about 750,000 skiers and snowboarders each season. Variable costs are about $13 per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices. Read the requirements. Requirement 1. Would Mount Snow emphasize target pricing or cost-plus pricing? Why? Mount Snow should emphasize a cost-plus approach to pricing because it has been able to differentiate its ski resort from others in the area. Because of its good reputation, managers will have some control over pricing. Of course, they still need to consider whether the cost-plus price is within the range customers are willing to pay. Requirement 2. If other resorts in the area charge $84 per day, what price should Mount Snow charge? Complete the following table to calculate the price Mount Snow should charge per lift ticket. Fixed costs Plus: Total variable costs Total costs Plus: Desired profit Target revenue Divided by: Number of skiers/snowboarders Price per lift ticket 36000000 9750000 45750000 20250000 66000000