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The City of Blakston owns and operates a community swimming pool. The pool is open each year for 90 days during the summer months of June, July, and August. A daily admission is charged to patrons of the pool. By law, 10% of all recreational and sporting fees must be remitted to a state tourism promotion fund. The City Manager has set a goal that pool admission revenue, after subtracting the state fee and variable costs, must be sufficient to cover the fixed costs. Variable costs are assumed to be 15% of gross revenue. Fixed costs for the three-month period total $33,000. The following budget for the pool has been prepared for the current year. The City Manager is trying to determine what admission mix is necessary to break even and what actions could be taken to eliminate the expected deficit.A. Given the anticipated mix of adult and student admissions, how many total admissions must the pool have in order to break even for the season? B. Regardless of the admissions mix, what is the highest number of admissions that would be necessary to break even for the season? C. Regardless of the admissions mix, what is the lowest number of admissions that would be necessary to break even for the season? D. The City Manager is considering several pricing strategies that could increase the admissions fees at the swimming pool. Define each of the pricing strategies listed below and discuss how each could help to eliminate the expected deficit. 1. Product-mix pricing. 2. Volume discount pricing. 3. Penetration pricing. 4. Off-peak pricing. |