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.

Would SnowDelights emphasize target costing or cost$-$plus pricing. Why?

If other resorts in the area charge $$58$ per day, what price should SnowDelights charge?

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 $$ control over pricing. Of course, they still need to consider whether the $$ 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.$)$

$$

Plus: $$

$$

$$

$$

Plus: $$

$$

Target revenue $$

Divided by: $$

$$

Price per lift ticket