Root Builders builds $1,500-$square$-$foot starter tract homes in the fast$-$growing suburbs of Houston. Land and labor are inexpensive, and competition among developers is fierce. The homes are "cookie$-$cutter," with any upgrades added by the buyer after the sale. Root Builders' costs per developed sublot are as follows:

View the costs.

Root 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 $$202,000$ each.

Read the requirements.

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

Root will need to emphasize a $$ approach to pricing. Because the tract homes are not unique and face stiff competition, Root will 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 frofit levels. $($Use parentheses or a minus sign to indicate a profit shortfall.$)$

$$

Less: $$

Target cost per home

Less: $$

Expected excess profit $($profit shortfall$)$