Winter Sports operates a Rocky Mountain ski resort. The company is planning its lift sket pricing for the coming skisenton Investors would like to cam a 17% retum on the company's 5115 million of assets. The company incurs primarily forced costs to groom the runs and operate the lifts Wintersports projects foxed costs to be $44.000.000 for the ski season. The resort serves 775,000 skolers and snowboarders each season. Variable costs are $7 per guest. Currently, the resort has such a favorable reputation among skers and snowboarders that it has some control over the ticket prices 1. Would Winter Sports emphasize target costing or cost-plus pricing Why? 2. If other resorts in the area charge 566 per day, what price should Winter Sports Charge? 1. Would Winter Sports emphasize target costing or cost-plus priong Ww? Winter Sports 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 other resants in the area charge 566 per day, what price should Winter Sports cargo? Complete the following table to calculate the price Winter Sports should charpe (Round your answer to the nearest cent.) Pus Pre Target revenue Divided by Price perin ticket Choose from any list or enter any number in the input fields and then click Check Answer Clear All Check An 1 part remaining SnowDelight operates a Rocky Mountairesort. The company is planning its inicket pricing for the coming season Investors would like to sama 15% roturn on the company's $100 million of assets. The company incurs primarily fit costs to groom the runs and operate the ins SnowDelight projects food costs to be 533,750,000 for the season. The resort serves about 750,000 skor and snowboarders each season. Variable costs are $10 per guest. The resort had such a favorable reputation among skers and snowboarders that it had some control over the ticket prices Assume that SnowDelight's reputation has diminished and other resorts in the vicinity are charging only 305 per inickot. SnowDelight has become a pricker and won't be able to charge month its compettors. At the market price, SnowDelight's managers believe they will still serve 750,000 skers and snowboarders cachoton Read the requirements 1. SnowDelight can't reduce the costs, what proft will it eam State your answer in dollars and as a percent of assets. We investors be happy win the profit bovel? Show your walysis Compito the following table to calculate SnowDolght's projected income and excom profit or shortal. (Us parentheson or a minus sign to show is prole shortfill) Revenge at market price Less Total costs Operating income Compared to the desired operating income of Expected excess profit profit shortfall) IUWDelyn pueLIS MUU WSIS $33,750,000 for the ski seaso le costs are $10 per guest. The resort had such a favorable reputation among skiers and snowboarders that it had sor as diminished and other resorts in the vicinity are charging only $65 per lift ticket. SnowDelight has become a price-ta wDelight's managers believe they will still serve 750,000 skiers and snowboarders each season. what profit will it earn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit Snow shd Requirements me of 1. If SnowDelight can't 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? Show your analysis. 2. Assume that SnowDelight has found ways to cut its fixed costs to $30 million. What is its new target variable cost per skier/snowboarder? Compare this to the current variable cost per skier/snowboarder. Comment on your results. Print Done ad then click Check
