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 14% of the variable cost of each home sale. Similar homes offered by competing builders sell for $203,000 each. Read the requirements. EEB (Click the icon to view the costs.) Requirement 1. Which approach to pricing should Gunter Builders emphasize? Why? Gunter will need to emphasize a control over pricing. V approach to pricing. Because the tract homes are V stiff competition, Gunter will 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 Expected excess profit (profit shortfall) Given the current market price and Gunter Builder's current variable costs, the company will to achieve ts target profit. ts profit willl by S per home sale. Requirement 3. Bathrooms and kitchens are typically the most important selling features of a home. Gunter Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $14,000 per home but would enable the company to increase the selling prices by $24,500 per home (in general, kitchen and bathroom upgrades typically add at least 150% of their cost to the value of any home.) lf Gunter Builders upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner? Show your analysis. Compute the new cost-plus price per home. Plus: Total vaiable costs Plus: Cost-plus price The new cost-plus price, with bath and kitchen upgrades, is actually $227,500, as expected, it will earn V the expected market price of an upgraded house. If Gunter can sell the upgraded homes for its target profit. Gunter upgrade the bathrooms and kitchens so that it has control over pricing. Data Table Land $ 50,000 $ 120,000 $ 9,000 3,000 Variable marketing costs Print Done