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Data table Land Construction Landscaping Variable selling costs. Print - X $ 50,000 125,000 8,000 9,000 Done 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? X

Data table Land Construction Landscaping Variable selling costs. Print - X $ 50,000 125,000 8,000 9,000 Done 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? X

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QC 52.

Data table Land Construction Landscaping Variable selling costs Print $ Done 50,000 125,000 8,000 9,000 X 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? Print - X Done
Transcribed Image Text:Data table Land Construction Landscaping Variable selling costs Print $ Done 50,000 125,000 8,000 9,000 X 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? Print - X Done
McKee 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. McKee Builders's costs per developed sublot are as follows: (Click the icon to view the costs.) Requirement 1. Which approach to pricing should McKee Builders emphasize? Why? McKee Builders will need to emphasize a stiff competition. approach to pricing because they are C McKee Builders would like to earn a profit of 14% of the variable cost of each home sold. Similar homes offered by competing builders sell for $208,000 each. Assume the company has no fixed costs. Read the requirements. This means McKee will control over pricing because the tract homes are
Transcribed Image Text:McKee 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. McKee Builders's costs per developed sublot are as follows: (Click the icon to view the costs.) Requirement 1. Which approach to pricing should McKee Builders emphasize? Why? McKee Builders will need to emphasize a stiff competition. approach to pricing because they are C McKee Builders would like to earn a profit of 14% of the variable cost of each home sold. Similar homes offered by competing builders sell for $208,000 each. Assume the company has no fixed costs. Read the requirements. This means McKee will control over pricing because the tract homes are
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