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Preston 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. Preston Builders' costs per developed sublot are as follows: (Click the icon to view the costs.) Requirement 1. Which approach to pricing should Preston Builders emphasize? Why? Preston Builders will need to emphasize a target-costing approach to pricing because they are price-takers. Preston Builders would like to earn a profit of 16% of the variable cost of each home sold. Similar homes offered by competing builders sell for $209,000 each. Assume the company has no fixed costs Read the reguirements. This means Preston will not have much control over pricing because the tract homes are not unique and face stiff competition Requirement 2. Will Preston 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 Data table Land Construction Landscaping Variable selling costs print s Done 55,000 1267000 5,000 27000