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8-12 please help with whole question. please make sure answer isnt cut off. thank you! Requirement 1. Which approach to pricing should Preston Builders emphasizo?
8-12
Requirement 1. Which approach to pricing should Preston Builders emphasizo? Why? Preston Builders will need to emphasize a approach to pricing because they are over pricing because the tract homes are stiff competition control This means Preston will Requirement 2. Will Preston Builders be able to achieve its target profit levels? Begin by calculating the target cost. Market price of similiar homes Less: Desired profit Target full cost per home Given the current market price and Preston's current variable costs, the company will The company's profit will the target by to achieve its desired profil per home sale. Calculate the new cost-plus price per home. Current variable cost per home Plus: Variable cost of kitchen and bathroom upgrade per home Total variable cost per home Plus: Desired profit per home Cost-plus price per home The now cost-plus price per home, with bath and kitchen upgrades, is actually the expected market price of an upgraded house. If Preston can sed the upgraded homes for $260,500, as expected, he will earn V his desired profit. Proston upgrade the bathrooms and kitchens so that he has control over pricing Chans Kyler Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Atlanta. Land and labor are cheap, and competition among developers is fierce. The homes are a standard model, with any upgrades added by the buyer after the sale. Kyler Builders' costs per developed sublot are as follows: (Click the icon to view the costs.) X Data table Land $ 52,000 128,000 Construction 7,000 Landscaping Variable selling costs 6,000 Kyler Builders would like to earn a profit of 14% of the variable cost of each home sold. Similar homes offered by competing builders sell for $205,000 each. Assume the company has no fixed costs. Read the requirements. please help with whole question.
please make sure answer isnt cut off.
thank you!
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