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Please answer for all parts, Thank you! Winter Sports Inc. operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for
Please answer for all parts, Thank you!
Winter Sports Inc. 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 the company's $100 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. Winter Sports projects fixed costs to be $33,750,000 for the ski season. The resort serves 750,000 skiers and snowboarders each season. Variable costs are $10 per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices. 1. Would Winter Sports emphasize target costing or cost-plus pricing. Why? 2. If other resorts in the area charge $65 per day, what price should Winter Sports charge? 2. If other resorts in the area charge $65 per day, what price should Winter Sports charge? Complete the following table to calculate the price Winter Sports should charge. (Round your answer to the nearest cent.)Step by Step Solution
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