SnowDream 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 $12\%$ retum on investment on the company's $$111,000,000$ of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. SnowDream projects fixed costs to be $$37,000,000$ for the ski se The resort serves about $680,000$ 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 SnowDream emphasize target pricing or cost$-$plus pricing? Why?

SnowDream should emphasize a $$ approach to pricing because it has been able to differentiate its ski resort from others in the area. Because of its good reputation, managers have $$ control over pricing. Of course, they still need to consider whether the $$ price is within the range customers are willing to pay.

Requirement $2$ If other resorts in the area charge $$83$ per day, what price should SnowDream charge?

Complete the following table to calculate the price SnowDream should charge per lift ticket.

$$

$$

Plus: $$

$$

Plus: $$

$$

$$

Divided by: $$

Price ner lift ficket $$Sem rem