2.

Kyler Builders would like to earn a profit of 16% of the Kyler Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Houston. Land and variable cost of each home sale. Similar homes offered labor are cheap, and competition among developers isby competing builders sell for $205,000 each. fierce. The homes are "cookie-cutter," with any upgrades added by the buyer after the sale. Kyler Builders' cost per developed sublot are as follows Requirements 1. Which approach to pricing should Kyler Builders emphasize? Why? 2. Will Kyler Builders be able to achieve its target profit levels? Show your computations. 3. Bathrooms and kitchens are typically the most important selling features of a home. Kyler Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $26,000 per home but would enable the company to increase the selling prices by $45,500 per home (in general, kitchen and bathroom upgrades typically add at least 150% of their cost to the value of any home.) If Kyler Builders upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner? Show your analysis