QC 52. Data tableLandConstructionLandscapingVariable selling costsPrint$Done50,000125,0008,0009,000XRequirements1. 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. McKeeBuilders could differentiate the homes by upgrading the bathrooms and kitchens. The upgradeswould 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 tothe value of any home.) If McKee Builders makes the upgrades, what will the new cost-plus priceper home be? Should the company differentiate its product in this manner?Print- XDone McKee Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Atlanta. Landand labor are cheap, and competition among developers is fierce. The homes are a standard model, withany upgrades added by the buyer after the sale. McKee Builders's costs per developed sublot are asfollows:(Click the icon to view the costs.)Requirement 1. Which approach to pricing should McKee Builders emphasize? Why?McKee Builders will need to emphasize astiff competition.approach to pricing because they areCMcKee Builders would like to earn a profit of 14% of the variable cost of each home sold. Similarhomes offered by competing builders sell for $208,000 each. Assume the company has no fixedcosts.Read the requirements.This means McKee willcontrol over pricing because the tract homes are

The variable cost increase with the increase in output and it indicates that variable cost are…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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