(Solved): McKee Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Atlanta ...

McKee Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Atlanta. Land McKee Builders would like to earn a profit of $$14\%$$ of the variable cost of each home sold. Similar 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. McKee Builders's costs per developed sublot are as homes offered by competing builders sell for $$\$208,000$$ each. Assume the company has no fixed follows: (Click the icon to view the costs.) costs. Read the Requirement 1. Which approach to pricing should McKee Builders emphasize? Why? McKee Builders will need to emphasize a approach to pricing because they are This means McKee will control over pricing because the tract homes are stiff competition. Data table Requirements 1. Which approach to pricing should McKee Builders emphasize? Why? 2. Will McKee Builders be able to achieve its target profit levels? 3. Bathrooms and kitchens are typically the most important selling features of a home. McKee Builders could differentiate the homes by upgrading the bathrooms and kitchens. The upgrades would cost $$\$30,000$$ per home but would enable McKee Builders to increase the selling prices by $$\$52,500$$ per home. (Kitchen and bathroom upgrades typically add about $$175\%$$ of their cost to the value of any home.) If McKee Builders makes the upgrades, what will the new cost-plus price per home be? Should the company differentiate its product in this manner?