SnowDelights 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 20% return on the company's $110 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. SnowDelights projects fixed costs to be $38,200,000 for the ski season. The resort serves 875,000 skiers and snowboarders each season. Variable costs are $9 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 SnowDelights emphasize target costing or cost-plus pricing. Why? 2. If other resorts in the area charge $58 per day, what price should SnowDelights charge? 1. Would SnowDelights emphasize target costing or cost-plus pricing. Why? SnowDelights 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 favorable 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. 2. If other resorts in the area charge $58 per day, what price should SnowDelights charge? Complete the following table to calculate the price SnowDelights should charge. (Round your answer to the nearest cent.) Fixed costs $ 38,200,000 Plus: 7,875,000 Total variable costs Total costs $ 46,075,000 Plus: Desired profit 22,000,000 Target revenue $ 68,075,000 Divided by: Number of skiers / snowboarders 875,000 $ 77.80 Price per lift ticket If other resorts in the area charge $58 per day, what price should SnowDelights charge? The price is be able to charge competing ski resorts in the area. Given SnowDelights reputation, they should a day without affecting their volume