Previous question Preston Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Preston Builders would like to earn a profit of 16% of the variable cost of each home Boston. Land and labor are cheap, and competition among developers is fierce. The homes are sale. Similar homes offered by competing builders sell for $203,000 each. "cookie-cutter," with any upgrades added by the buyer after the sale. Preston Builders' cost per developed sublot are as follows: Read the requirements. EFE(Click the icon to view the costs.) Requirement 3. Bathrooms and kitchens are typically the most important selling features of a home. Preston Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $32,000 per home but would enable the company to increase the selling prices by $56,000 per home (in general, kitchen and bathroom upgrades typically add at least 150% of their cost to the value of any home.) If Preston Builders upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner? Show your analysis. Compute the new cost-plus price per home. X Data table Plus: Total variable costs Land $ 50,000 Plus: Construction $ 120,000 Cost-plus price Landscaping .... . . . . . .. . .. . $ 5,000 Variable marketing costs . .... . $ 4,000 Help me solve this Video Get more help - Check