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Builders builds1,500-square-foot starter tract homes in the fast-growing suburbs of AtlantaAtlanta. ...

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Accounting

Builders builds1,500-square-foot starter tract homes in the fast-growing suburbs of
AtlantaAtlanta.
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.
RouseRouse
Builders' costs per developed sublot are as follows:
View the costs.
LOADING...
RouseRouse
Builders would like to earn a profit of
1414%
of the variable cost of each home sale. Similar homes offered by competing builders sell for
$ 204 comma 000$204,000
each.
Read the requirements.
LOADING...
Question content area bottom
Part 1
Requirement 1. Which approach to pricing should
RouseRouse
Builders emphasize? Why?
RouseRouse
will need to emphasize a
cost-plus
target-costing
approach to pricing. Because the tract homes are
not unique and face
unique and do not face
stiff competition,
RouseRouse
will
have a lot of
not have much
control over pricing.

Answer & Explanation Solved by verified expert
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