Kyler Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Atlanta, Land and labor are cheap, and competition among developers is fierce. The homes are a standard model, with any upgrades added by the buyer after the sale. Kyler Builders' costs per developed sublot are as follows: (Click the icon to view the costs.) Kyler Builders would like to earn a profit of 14% of the variable cost of each home sold. Similar homes offered by competing builders sell for $206,000 each. Assume the company has no fixed costs. Read the requirements. . Requirement 1. Which a - X Data Table Kyler Builders will need to This stiff means Kyler will competition Land 56,000 Requirement 2. Will Kyld Construction 121,000 Begin by calculating the Landscaping 8,000 Market price of similiar hl Variable selling costs 4,000 Less: Desired profit Target full cost per home Given the current marke Print Done achieve its desired company will pfit. The company's profit will Requirement 3. Bathrooms and kitchens are typically the most important selling features of a home. Kyler Builders could differentiate the homes by upgrading the bathrooms and kitchens. The upgrades would cost $24,000 per home but would enable Kyler Builders to increase the sales prices by $42,000 per home. (Kitchen and bathroom upgrades typically add about 175% of their cost to the value of any home.) If Kyler Builders makes the upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner? Calculate the new cost-plus price per home. Choose from anv list or enter any number in the innuitfioide and then rantinath This Requirement 1. Which approach to pricing should Kyler Builders emphasize? Why? Kyler Builders will need to emphasize a approach to pricing because they are means Kyler will control over pricing because the tract homes are competition stiff Requirement 2. Will Kyler Builders be able to achieve its target profit levels? Begin by calculating the target cost. Market price of similiar homes Less: Desired profit Target full cost per home Given the current market price and Kyler's current variable costs, the to achieve its desired company will profit The company's profit will the target by per home sale. Requirement 3. Bathrooms and kitchens are typically the most important selling features of a home, Kyler Builders could differentiate the homes by upgrading the bathrooms and kitchens. The upgrades would cost $24,000 per home but would enable Kyler Builders to increase the sales prices by $42,000 per home. (Kitchen and bathroom upgrades typically add about 175% of their cost to the value of any home.) If Kyler Builders makes the upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner? Calculate the new cost-plus price per home. Current variable cost per home Plus: Variable cost of kitchen and bathroom upgrade per home Total variable cost per home Plus: Desired profit per home Cost-plus price per home Choose from any list or enter any number in the input fields and then continue to the next question. Kyler Builders builds 1,500-square-foot starter tract homes Kyler Builders would like to earn a profit of 14% Begin by calculating the target cost. Market price of similiar homes Less: Desired profit Target full cost per home Given the current market price and Kyler's current variable costs, the to achieve its desired company will profit. The company's profit will the target by per home sale. Requirement 3. Bathrooms and kitchens are typically the most important selling features of a home, Kyler Builde could differentiate the homes by upgrading the bathrooms and kitchens. The upgrades would cost $24,000 per ho but would enable Kyler Builders to increase the sales prices by $42,000 per home. (Kitchen and bathroom upgrad typically add about 175% of their cost to the value of any home.) If Kyler Builders makes the upgrades, what will tt new cost-plus price per home be? Should the company differentiate its product in this manner? Calculate the new cost-plus price per home. Current variable cost per home Plus: Variable cost of kitchen and bathroom upgrade per home Total variable cost per home Plus: Desired profit per home Cost-plus price per home Should the company differentiate its product in this manner? The new cost-plus price per home, with bath and kitchen upgrades, is actually higher than the expected market pri of an upgraded house. If Kyler can sell the upgraded homes for $248,000, as expected, he will eam his desired profit. Kyler upgrade the bathrooms and kitchens so that he has control over pricing Choose from any list or enter any number in the input fields and then continue to the next question. Get More Help Time Remaining: 01-01-07
