Sesnie Builders builds $1,500-$square$-$foot starter tract homes in the fast$-$growing suburbs of Hartford. 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. Sesnie Builders' cost per developed sublot are as follows:

$($Click the icon to view the costs.$)$

Sesnie Builders would like to earn a profit of $16\%$ of the variable cost of each home sale. Similar homes offered by competing builders sell for $$208,000$ each.

Read the requirements.

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

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

Data table

$\backslash$table$[[$Land$,50,000],[$Construction$,124,000],[$Landscaping$,9,000],[$Variable marketing costs $......$ $$,4,000]]$

Requirements

Which approach to pricing should Sesnie Builders emphasize? Why?

Will Sesnie 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. Sesnie Builders could differentiate the homes by upgrading bathrooms and kitchens. The upgrades would cost $$20,000$ per home but would enable the company to increase the selling prices by $$35,000$ per home $($in general, kitchen and bathroom upgrades typically add at least $150\%$ of their cost to the value of any home.$)$ If Sesnie Builders upgrades, what will the new cost$-$plus price per home be$?$ Should the company differentiate its product in this manner? Show your analysis.

Done

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