question 1

SnowDelight 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. SnowDelight 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 $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. Read the requirements. Requirement 1. Would SnowDelight emphasize target pricing or cost-plus pricing? Why? Snowdelight should emphasize a 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 control over pricing. Of course, they still need to consider whether the price is within the range customers are willing to pay