Required: 1. What are the current gross profit margin percentages on both systems? 2. UR Safe's management believes that it must drop the price on the ICU 100 to $760 and on the ICU 900 to $1,400 to remain competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the target cost needed for each product to maintain the current gross profit margin percentages. (For all requirements, round your percentage answers to 2 decimal places (i.e. .1234 -12.34%) and other answers to the nearest whole dollar amount.) 1. Current profit margin 2. Profit margin Target cost ICU 100 % 228 % ICU 900 % %
Required: 1. What are the current gross profit margin percentages on both systems? 2. UR Safe's management believes that it must drop the price on the ICU 100 to $760 and on the ICU 900 to $1,400 to remain competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the target cost needed for each product to maintain the current gross profit margin percentages. (For all requirements, round your percentage answers to 2 decimal places (i.e. .1234 -12.34%) and other answers to the nearest whole dollar amount.) 1. Current profit margin 2. Profit margin Target cost ICU 100 % 228 % ICU 900 % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
[The following information applies to the questions displayed below.]
UR Safe Systems installs home security systems. Two of its systems, the ICU 100 and the ICU 900, have these
characteristics:
Design Specifications
Video cameras
Video monitors
Motion detectors
Floodlights
Alarms
Wiring
Installation
1,090 feet
25 hour
The ICU 100 sells for $820 installed, and the ICU 900 sells for $1,530 installed.
1.
2.
Current profit margin
Profit margin
Target cost
ICU 100
2
2
4
Required:
1. What are the current gross profit margin percentages on both systems?
2. UR Safe's management believes that it must drop the price on the ICU 100 to $760 and on the ICU 900 to $1,400 to remain
competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the
target cost needed for each product to maintain the current gross profit margin percentages.
ICU 100
2
690 feet
15 hour
(For all requirements, round your percentage answers to 2 decimal places (i.e. .1234 = 12.34%) and other answers to the nearest
whole dollar amount.)
%
ICU 900
2
2
7
6
1
ICU 900
Cost Data
$ 118/ea
$ 65/ea
$ 10/ea
$ 5/ea
$ 11/ea
$ 0.2/feet
$ 10/hour
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73b38660-17bd-449b-b5cf-80c2934669ab%2F0a3d80bb-6440-4a30-a467-4b0ff8931ebb%2Fi2iynpf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
UR Safe Systems installs home security systems. Two of its systems, the ICU 100 and the ICU 900, have these
characteristics:
Design Specifications
Video cameras
Video monitors
Motion detectors
Floodlights
Alarms
Wiring
Installation
1,090 feet
25 hour
The ICU 100 sells for $820 installed, and the ICU 900 sells for $1,530 installed.
1.
2.
Current profit margin
Profit margin
Target cost
ICU 100
2
2
4
Required:
1. What are the current gross profit margin percentages on both systems?
2. UR Safe's management believes that it must drop the price on the ICU 100 to $760 and on the ICU 900 to $1,400 to remain
competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the
target cost needed for each product to maintain the current gross profit margin percentages.
ICU 100
2
690 feet
15 hour
(For all requirements, round your percentage answers to 2 decimal places (i.e. .1234 = 12.34%) and other answers to the nearest
whole dollar amount.)
%
ICU 900
2
2
7
6
1
ICU 900
Cost Data
$ 118/ea
$ 65/ea
$ 10/ea
$ 5/ea
$ 11/ea
$ 0.2/feet
$ 10/hour
%
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