Question: Please help me solve all the requirements Root Builders bulds 1,500-square-foot starter tract homes in the fast-growing suburbs of Chicago. Land and labor are cheap,
Root Builders bulds 1,500-square-foot starter tract homes in the fast-growing suburbs of Chicago. Land and labor are cheap, and competition among dovelopers is fierce. The homes are "cookie-cutter," with any upgrades added by the buyer after the sale. Root Builders' cost per developed sublot are as follows: (Click the icon to view the costs.) Root Bulders would like to earn a profit of 14% of the variable cost of each home salo. Similar homes offered by competing builders sell for $207,000 each. Read the requirements. Requirement 1. Which approach to pricing should Root Builders emphasize? Why? Root wit need to emphasize a approach to pricing. Becouse the tract homes are stiff compotition, Root will control over pricing. Requirements 1. Which approach to pricing should Root Builders emphasize? Why? 2. Wil Root Builders be able to achieve its target profit levels? Show your computations. 3. Bathrooms and kitchens are typicaly the most important selling features of a home. Root Builders could dilferentiate the homes by upgrading bathrooms and kichens. The upgrades would cost $26,000 per home but would enable the company to increase the solling prices by $45,500 per home in general, kichen 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. Data table
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