Gildea Builders builds 1'500squarefoot starter tract homes in the fastgrowing suburbs of l Gildea Builders would like to earn a prot of 16% of the variable cost of each home sale. Atlanta. Land and labor are cheap, and com petition among developers is erce. The homes are H Similar homes offered by competing builders sell for $204.000 each. "cookiecutter," with any upgrades added by the buyer after the le. lGildea Builders' cost per developed sublot are as follows: g [Click the icon to view the costs.) Read the m uire me nts. Requirement 1. Which approach to pricing should Gildea Builders emphasize? Why? Gildea will need to emphasize a target-costing approach to pricing. Because the tract homes are not unique and face stiff competition, Gildea will not have much control over pricing. Requirement 2. Will Gildea Builders be able to achieve its target prot evels? Show your computations. Complete the following table to show whether Gildea Builders will be able to achieve their target prot levels. {Use parentheses or a minus sign to indicate a profit shortfall.) l: Less: Requirements Target cost per home L935: 1. Which approach to pricing should Gildea Builders emphasize? Why? Expected excess profit {profit shortfall} 2. Will Gildea 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. Gildea Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $24000 per home but would enable the company to increase the selling prices by Data table $42000 per home (in general. kitchen and bathroom upgrades typically add at least 150% of their cost to the value of any home.) If Gildea Builders upgrades, what will the new costplus price per home be? Should the company differentiate its product in this manner? Show your analysis. Land ........................ $ 50,000 Construction ................. $ 'I 21 .000 Landscaping ................. $ 6.000 E Variable marketing costs ...... $ 3,000 Actual current variable cost Desired profit Fixed costs Revenue at market price Total fixed costs