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Lagoon is an amusement park that offers family-friendly entertainment and attractions. The park boasts more than 25 acres of fun. Lagoons managers have identified the major activities that drive the cost of operating the park. The activity cost pools, the cost driver for each activity, and the cost per unit of the cost driver for each pool are:
Activity	Description of Activity	Cost Driver	Cost per Unit of Cost Driver
1. Ticket sales and verification	Selling and verifying tickets for entry into the park	Number of tickets sold	$ 3.35	per ticket sold
2. Operating attractions	Loading, monitoring, off-loading patrons on attractions	Number of runs	$ 90.00	per run
3. Litter patrol	Roaming the park and cleaning up waste as necessary	Number of litter patrol hours	$ 20.00	per hour
The following information describes the existing operations:
a. Admission price for patrons			$ 35.00	per patron
b. Target operating income % of revenues			35%	% of revenues
c. The average number of patrons per week:			55,000	per week
d. The total number of runs across all attractions per week:			11,340	per week
e. Hours of litter patrol per week:			1,750	per week
In reponse to competitive pressures, Lagoon is looking to enact the following changes in order to main its current average number of patrons per week:
a. Reduction in admission price for patrons:			$ (2.00)	per patron
b. Reduction in ticket sales and verification:			$ (0.35)	per ticket sold
c. Reduction in number of attraction running hours:			(1,000)	per week
d. Increased cost for extra refuse containers:			$ 250.00	per week
e. Decreased litter patrol hours:			-20%	per week

1 Will Lagoon achieve its target operating income % of revenues at the current ticket price before any operating changes? $ Operating Income Operating Income % Target Reached? 685,150 35.6% 1 Will Lagoon achieve its target operating income % of revenues at the current ticket price before any operating changes? $ Operating Income Operating Income % Target Reached? 685,150 35.6%

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