Homework: M 8 Homework O Part 2 of 5 Question 2 > Score: 1.26 of 6 points B-Graded Save Rouse Builders builds 1,500-square-foot starter tract homes in the fast-growing Rouse Builders would like to earn a profit of 14% of the variable cost of each suburbs of Atlanta Land and labor are cheap, and competition among developers home sold. Similar homes offered by competing builders sell for $206,000 each is fierce. The homes are a standard model with any upgrades added by the buyer Assume the company has no fixed costs. after the sale. Rouse Builders' costs per developed sublot are as follows: Click the icon to view the costs.) Read the requirements Requirement 1. Which approach to pricing should Rouse Builders emphasize? Why? Rouse Builders will need to emphasize a target-costing approach to pricing because they are price-takers. This means Rouse will not have much control over pricing because the tract homes are not unique and face stiff competition Requirement 2. Will Rouse Builders be able to achieve its target profit levels? Bogin by calculating the target cost. Market price of similar homos Loss: Dosired profit Target full cost per home Enter any number in the edit fields and then click Check Answer - x Data Table ed Land $ 58,000 Construction 121,000 6,000 Landscaping Variable selling costs 4,000 Print Done ws Requirements 1. Which approach to pricing should Rouse Builders emphasize? Why? 2. Will Rouse Builders be able to achieve its target profit levels? 3. Bathrooms and kitchens are typically the most important selling features of a home. Rouse Builders could differentiate the homes by upgrading the bathrooms and kitchens. The upgrades would cost $22,000 per home but would enable Rouse Builders to increase the sales prices by $38,500 per home. (Kitchen and bathroom upgrades typically add about 175% of their cost to the value of any home.) If Rouse Builders makes the upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner