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Data Table -X Land $ 51,000 Construction 121,000 5,000 Landscaping Variable selling costs 2,000 Print DoneRequirements - X 1. Which approach to pricing should Smith Builders emphasize? Why? 2. Will Smith Builders be able to achieveQuestion Help Smith Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Atlanta. Land and la

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Answer #1

Answer:

New cost plus price per home:

Particulars

Amount

Current Variable Cost per home

$        179,000

Plus Variable cost of Kitchen and Bathroom upgrade per home

$          30,000

Total Variable cost per home

$        209,000

Plus Desired profit per home ($209000*16%)

$          33,440

Cost Plus price per home

$        242,440

Yes, the company should differentiate its product in this manner as on upgradation company can earn more than desired profit.

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