Need help only on Requirement $3$ Johnson Builders builds $1,500-$square$-$foot starter tract homes in the fast$-$growing suburbs of Boise. 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. Johnson Builders' cost per developed sublot are as follows:

$($Click the icon to 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 $$207,000$ each.

Read the requirements.

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

Requirement $2.$ Will Johnson Builders be able to achieve its target profit levels? Show your computations.

Data table

Land.

Construction

Landscaping $...$

Variable marketing costs $....$ $ $3,000$

Given the current market price and Johnson Builder's current variable costs, the company will not be able to to achieve

its target profit. Its profit will by $$6,900$ per home sale.

home be$?$ Should the company differentiate its product in this manner? Show your analysis.

Compute the new cost$-$plus price per home.

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.