question 1:

Kyler Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Denver. 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. Kyler Builders' cost per developed sublot are as follows: Kyler Builders would like to earn a profit of 14% of the variable cost of each home sale. Similar homes offered by competing builders sell for $201,000 each Read the requirements - . X Data table Land.... $ 56,000 ze? Why? Construction.. $ 129,000 se the tract homes are not unique and face stiff competition, Kyler will $ 5,000 Landscaping.... Variable marketing costs $ 1,000 s2 Show Vour computations - Requirements Print Tay cost per TOMTO Less 1. Which approach to pricing should Kyler Builders emphasize? Why? 2. Will Kyler Builders be able to achieve its target profit levels? Show your computations 3. Bathrooms and kitchens are typically the most important selling features of a home. Kyler 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 Kyler Builders upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner? Show your analysis. Expected excess profit (profit shortfall) Help me solve this Video Print Done Type here to search O hp 2 49F Requirement 1. Which approach to pricing should Root Builders emphasize? Why? stiff competition, Root will Root will need to emphasize a target-costing approach to pricing. Because the tract homes are not unique and face not have much control over pricing. Requirement 2. Will Root Builders be able to achieve its target profit levels? Show your computations. Complete the following table to show whether Root Builders will be able to achieve their target profit levels. (Use parentheses or a minus sign to indicate a profit shortfall.) Revenue at market price $ Less Desired profit Target cost per home Less Actual current variable cost Expected excess profit (profit shortfall) not be able to to achieve Given the current market price and Root Builder's current variable costs, the company will its target profit Its profit will fall short hv ner home sale Help me solve this Video Get more help Similar question Type here to search BI ? 49F A Requirement 3. Bathrooms and kitchens are typically the most important selling features of a home. Root Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $18,000 per home but would enable the company to increase the selling prices by $31,500 per home (in general, kitchen and bathroom upgrades typically add at least 150% of their cost to the value of any home.) If Root 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. Current variable costs Plus: Variable cost of kitchen and bath upgrades Total variable costs Plus: Desired profit Cost-plus price The new cost-plus price, with bath and kitchen upgrades, is actually lower than the expected market price of an upgraded house. If Root can sell the upgraded homes for $235,500, as expected, it will earn more than its target profit. Root should upgrade the bathrooms and kitchens so that it has more control over pricing Help me solve this Video Get more help Similar question Bi Type here to search H 49F