Gunter Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Denver. Land and labor are cheap, and competition among developers is fierce. The homes are "cookie-cutter," with any upgrades added by the buyer after the sale. Gunter Builders' costs per developed sublot are as follows: Gunter Builders would like to earn a profit of 15% of the variable cost of each home sale. Similar homes offered by competing builders sell fc 207,000 $ each Read the requirements. (Click the icon to view the costs.) Requirement 1. Which approach to pricing should Gunter Builders emphasize? Why? Gunter will need to emphasize a approach to pricing. Because the tract homes are stiff competition, Gunter will control over pricing. Requirement 2. Will Gunter Builders be able to achieve its target profit levels? Show your computations. Complete the following table to show whether Gunter Builders will be able to achieve their target profit levels. (Use parentheses or a minus sign to indicate a profit shortfall.) Less: Target cost per home Less: Expected excess profit (profit shortfall) to achieve Given the current market price and Gunter Builder's current variable costs, the company will its target profit. Its profit will by S per home sale. A Requirements X 1. Which approach to pricing should Rouse Builders emphasize? Why? 2. Will Rouse 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. Rouse Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $32,000 per home but would enable the company to increase the selling prices by $56,000 per home (in general, kitchen and bathroom upgrades typically add at least 150% of their cost to the value of any home.) If Rouse Builders upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner? Show your analysis. Print Done Compute the new cost-plus price per home. Plus: Total variable costs Plus: Cost-plus price X Data Table $ 52,000 $ 129,000 Land... Construction.. Landscaping... Variable marketing costs $ $ 7,000 $ 2,000 Print Done