Question 11 Rolling Hills Golf Course is planning for the coming golfing season. Investors would...
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Accounting
Question 11
Rolling Hills Golf Course is planning for the coming golfing season. Investors would like to earn a 10% return on the company's $60,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $30,000,000 for the season. About 500,000 rounds of golf are expected to be played each year. Variable costs are about $17 per round of golf. Rolling Hills has a favorable reputation in the area and, therefore, has some control over the sales price of a round of golf. Using a cost-plus pricing approach, what sales price should Rolling Hills charge for a round of golf to achieve the desired profit?
| A. | $60 | |
| B. | $77 | |
| C. | $89 | |
| D. | $43 |
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