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8-12 Route Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Roure Builders would do to com a profit of 10% of the

8-12
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Route Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Roure Builders would do to com a profit of 10% of the variable cost of each home sold Atlanta Land and laborare cheap and competition among developers is force. The homes Smlar homes offered by competing builders sel for 5201 000 each Assume the company re a standard model with any upgrades adond by the buyer after the sale, Rouse Builders has noted costs costs per developed sublot are as follows: Click the icon to view the costs) Read the requirements GT Requirement 1. Which oproach to pricing should Route Builders emphasize? Why? Route Bulders will need to emphasize approach to pricing because they are This means House will control over prising because the Fact home comotion Data table O Land $ 54,000 Construction 121,000 Landscaping Variable selling costs 5,000 6,000 Requirements . 1. Which approach to pricing should Rouse Builders emphasize? Why? 2. Will Rouse Builders be able to achieve its target profit levels? 3. Bathrooms and kitchens are typically the most important selling features of a home, Rouse Builders could differentiate the homes by upgrading the bathrooms and kitchens. The upgrades would cost $26,000 per home but would enable Rouse Builders to increase the sales prices by $45,500 per home. (Kitchen and bathroom upgrades typically add about 175% of their cost to the value of any home.) If Rouse Builders makes the upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner

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