Requirement $1.$ If Winter Runs 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?Requirement $1.$ Which product should StoreAway emphasize? Why?

Complete the product mix analysis to determine the contribution margin per machine hour.

Complete the following table to calculate Winter Runs' projected income.

Revenue at market price

Less: Total costs

Operating income

$($Round the percentage to the nearest hundredth percent, X$.$XX$\%.)$

Winter Runs's projected operating income $($profit$)$ as a percent of assets amounts to

Will investors be happy with this profit level?

Requirement $2.$ Assume Winter Runs has found ways to cut its fixed costs to $$32,000,000.$ What is its new target variable cost per skier$/$snowboarder$?$

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

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Investors would like to earn a $15\%$ return on investment on the company's

$$148,500,000$ of assets. Winter Runs projects fixed costs to be $$35,000,000$ for the

ski season. The resort serves about $725,000$ skiers and snowboarders each

season. Variable costs are about $$8$ per guest. Last year, due to its

favorable reputation, Winter Runs was a price$-$setter and was able to charge $$5$

more per lift ticket than its competitors without a reduction in the number of

customers it received.

Assume that Winter Runs' reputation has diminished and other resorts in the vicinity

are charging only $$82$ per lift ticket. Winter Runs has become a price$-$taker and will

not be able to charge more than its competitors. At the market price, Winter Runs

managers believe they will still serve $725,000$ skiers and snowboarders each

season.

Revenue at market price

Less: Desired profit

Requirements

$1$

Target full cost

Less: Reduced level of fixed costs

If Winter Runs cannotreauce lis costs, wnat provil'wilitit earn? Jlate your

answer in dollars and as a percent of assets. Will investors be happy with the

profit level?

Assume Winter Runs has found ways to cut its fixed costs to $$32,000,000.$ What

is its new target variable cost per skier$/$snowboarder$?$