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.\ \ Requirements \ 1. Which approach to pricing should Gunter Builders emphasize? Why? \ 2. Will Gunter 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. Gunter Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $14,000 per home but would enable Gunter Builders 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). If 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.