Gunter Buldees bulds 1,500-square-foot stacter tract homes in the fast yowing suburbs of Derver: Land and laboc are cheap, and competition among developers is fierce. The hornes are "cookie-cutter," with any upgrades added by the buyer after the sale. Gunter Bulders' costs per developed sublot are as follows (Click the icon to view the costs) Gurter Bulders would like to earn a profit of 14% of the varable cost of each home sale. Simiar homes offered by competing bulders sell for $203,000 each Read the Data table Requirements 1. Which approach to pring should Gunter Bulders emphasue? Why? 2. Wil Gunter Bulders be able to achieve its target profit levels? Show your computations 3. Bachrooms and kitchens are typicaly the most important seling featires of a borme. Gurter Buldens coidd deferentate the homes by upgrading bathrooms and kachens. The upgrades. would cost $14,000 pee home be would enabie Gurter Bulders to increase the selling poces by $24,500 per home (in general, kitchen and bathroom upgrades typically add at least ison, of theic cost to the value of any hone, If Gurter Bualders upgads, what will the now contelus price per hore be? Should the compary diferentate its product in this manner? Show yout anaysis typically add at least 150% of their cost to the value of any home) II Gurter Buidoes upgrades, what will the new cosifpis pnce per home be? Should the compary differentiate its product in this manner? Show your analysis Compute the new cost-plus price per home. The now cost-plus prce, whth bath and kicher upgrades, is actially. \$221, 500 , as expected, it will eam is target profit. Gunter the expected makke pnce of an upgraded house. If Gunter can sel the upgraded homes for upgrade the bathrooms and kitchers so that it has control over pricing Gunter Buiders bulds 1,500 square-foot starter tract homes in the fast-gowing suburbs of Deriver, Land and labor are cheap, and compettion anong developens is ferce. The hornes ave "cookie-cutter," with any upgrades added by the buyer after the sale. Gunter. Bulders' costs per developed sutiot ave as follows. [Cick (Cick the icon to viow the costs) Guiter Buildes would the to ean a proft of 14% of the variable cost of each home sale. Similar homes offered by compoting builders sell for $203.000 oach Read the regiements. Requirement 1. Which apptoach to proing should Gunter Buiders emphasize/ Wity? Gunter will need to emphasize a appoach to preing Because the tract homes aro pricing stif compoteon, Gunter will contror over Requirement 2 Will Gurter Bulders be able to acheve is target pedit levels? Show your conpasions Given the cunent makiet pice and Gunter Bulder's current varable costs, the compary whl its targot proht its profis will by per home sale. to achiove Requirement 3. Batheooms and kitchens are typically the most unportant selling features of a home. Gunter Bulders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $14,000 per home but would enable the compary to increase the selling prces by $24,500 per horse (in gonocal, kitchen and bathroom upgrades typically add at least 150% of thoir cost to the value of any home) If Gunter Buiders upgrades, what will the new cost-plus price per home be? Should the compary differentiate its product in this manner? Show your analysis
