Question

Philadelphia Swim Club is planning for the coming year westors would like to eam a 10% bum on the company's $35.000.000 of assets. The company pemains found costs to maintain the summing pool Fixed costs are projected to be $12.900.000 for the year. About 520.000 members are expected to swim each year. Variable costs are about $12.00 per summer The Philadelphia Swim Club has a favorable reputation in the mea and therefore has some control over the membership price Using a cost-plus proach what price shound Philadelphia Sin Chib charge for a membership? OA 16.73 OB354 C $36.81 OD 50 Gick to set your answer. • Previous

Answer 1

B.$43.54.

fixed costs	12,900,000
variable costs (520,000*$12.00)	6,240,000
desired profit (35,000,000*10%)	3,500,000
total amount to be recovered	22,640,000

price to be charged = 22,640,000 / 520,000 members

=>$43.54.per member