Johnson Builders builds $1,500-5$quare$-$foot starter tract homes in the fast$-$growing suburbs of Atlanta, Land and labor are inexpensive, and competition among developers is fierce. The homes are "cookie$-$cutter," with any upgrades added by the buyer after the sale. Johnson Builders' costs per developed sublot are as follows:

View the costs.

Johnson Builders would like to earn a profit of $15\%$ of the variable cost of each home sale. Similar homes offered by competing builders sell for $$209,000$ each.

Read the requirements.

Requirement $1.$ Which approach to pricing should Johnson Builders emphasize? Why?

Johnson will need to emphasize a approach to pricing. Because the tract homes are stiff competition, Johnson will control over pricing.

not unique and face

unique and do not face

Requirements

Which approach to pricing should Johnson Builders emphasize? Why?

Will Johnson Builders be able to achieve its target profit levels? Show your computations.

Bathrooms and kitchens are typically the most important selling features of a home. Johnson Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $$30,000$ per home but would enable the company to increase the selling prices by $$52,500$ per home $($in general, kitchen and bathroom upgrades typically add at least $150\%$ of their cost to the value of any home$).$ If Johnson Builders upgrades, what will the new cost$-$plus price per home be$?$ Should the company differentiate its product in this manner? Show your analysis.