SnowDelights operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season.

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Read the requirements.

Requirement $1.$ If SnowDelights cannot 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?

Complete the following table to calculate SnowDelights' projected income.

Revenue at market price

Less: Total costs

Operating income

$($Round the percentage to the nearest hundredth percent, $x.xx\%.)$

SnowDelights's projected operating income $($profit$)$ as a percent of assets amounts to $\%.$

Will investors be happy with this profit level?

$$

Requirement $2.$ Assume SnowDelights has found ways to cut its fixed costs to $$34,800,000.$ What is its new target variable cost per skier$/$snowboarder$?$

Complete the following table to calculate SnowDelights' new target variable cost per customer. $($Round your final answer to the nearest cent.$)$

Revenue at market price

Less: Desired profit

Target full cost

Less: Reduced level of fixed costs

Target total variable costs

Divided by number of skiers $/$ snowboarders

Target variable cost per skier $/$ snowboarder $$

"More info

Investors would like to earn a $12\%$ return on investment on the company's $$111,000,000$ of assets. SnowDelights projects fixed costs to be $$37,000,000$ for the ski season. The resort serves about $680,000$ skiers and snowboarders each season. Variable costs are about $$7$ per guest. Last year, due to its favorable reputation, SnowDelights was a price$-$setter and was able to charge $$4$ more per lift ticket than its competitors without a reduction in the number of customers it received.

Assume that SnowDelights' reputation has diminished and other resorts in the vicinity are charging only $$77$ per lift ticket. SnowDelights has become a price$-$taker and will not be able to charge more than its competitors. At the market price, SnowDelights managers believe they will still serve $680,000$ skiers and snowboarders each season.