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Barre Falls Builders builds townhomes in a new subdivision just outside of Moncton. Land and labour are cheap, and competition among developers is fierce. The

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Barre Falls Builders builds townhomes in a new subdivision just outside of Moncton. Land and labour are cheap, and competition among developers is fierce. The homes in the subdivision are identical to another, but buyers can upgrade features by paying the difference. Barre Falls Builders' cost per developed sublot are as follows: : (Click the icon to view the costs.) Barre Falls Builders would like to earn a profit of 15% of the variable cost of each home sale. Similar homes offered by competing builders sell for $205,000 each. Requirements Requirement 1. Which approach to pricing should Barre Falls Builders emphasize? Why? Barre Falls will need to emphasize a approach to pricing. Because the townhomes are stiff competition, Barre Falls will control over pricing. Requirement 2. Will Barre Falls Builders be able to achieve its target profit levels? Show your computations. Complete the following table to show whether Barre Falls Builders will be able to achieve the target profit level. (Use parentheses or a minus sign to indicate a profit shortfall.) Less: Target costs VS: Expected excess profit (profit shortfall) X Given the current market price and Barre Falls's current variable costs, the company will Costs profit by $ per home sale. Requirement 3. Bathrooms and kitchens are typically the most important selling features of a h and kitchens. The upgrades would cost $21,000 per home but would enable Barre Falls Builders to increase the selling price dd at least 150% of their cost to the value of any home.) If Barre Falls Builders upgrades, what will the new cost-plus price per Land 52,000 your analysis. Compute the new cost-plus price per home. Construction 121,000 Landscaping 6,400 Variable marketing costs . . . . . . .. .. ... 1,300 Plus: Total variable costs Print Done ing: 00:59:55 Next

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