Johnson builders builds 1,500-square-foot startertract homes in the fast-growing suburbs of atlanta. land and labor arecheap, and competition among developers is fierce, the homes are a standard model, with any upgrades added by thebuyer afterthe sale, johnson builders’s costs per developed sublot are as follows: land 5 50.000construction 123,000landscaping 9,000variable selling costs 8,000johnson builders would like to earn a profit of 14% of the variable cost of each home sold. similar homes offered bycompeting builders sell for $207,000 each. assume the company has no fixed costs. requirements1. which approach to pricing should johnson builders emphasize? why? 2 will johnson builders be able to achieve its target profit levels? 3. bathrooms and kitchens are typically the most important selling features of a home. johnson builders could differentiatethe homes by upgrading the bathrooms and kitchens. the upgrades would cost $16,000 per home but would enablejohnson builders to increase the sales prices by $28,000 per home. (kitchen and bathroom upgrades typically add about175% of their cost to the value of any home.) if johnson builders makes the upgrades, what will the new cost-plus price perhome be? should the company differentiate its product in this manner?