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 ICU 100 ICU 900 1 3 Cost Data $ 150/ea 1 1 $ 75/ea 5 8 3 7 1 700 feet 16 hour 2 1,100 feet 26 hour $ 15/ea $8/ea $ 15/ea $0.10/feet $20/hour The ICU 100 sells for $810 installed, and the ICU 900 sells for $1,520 installed. 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 $750 and on the ICU 900 to $1,390 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.
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 ICU 100 ICU 900 1 3 Cost Data $ 150/ea 1 1 $ 75/ea 5 8 3 7 1 700 feet 16 hour 2 1,100 feet 26 hour $ 15/ea $8/ea $ 15/ea $0.10/feet $20/hour The ICU 100 sells for $810 installed, and the ICU 900 sells for $1,520 installed. 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 $750 and on the ICU 900 to $1,390 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
ICU 100
ICU 900
1
3
Cost Data
$ 150/ea
1
1
$ 75/ea
5
8
3
7
1
700 feet
16 hour
2
1,100 feet
26 hour
$ 15/ea
$8/ea
$ 15/ea
$0.10/feet
$20/hour
The ICU 100 sells for $810 installed, and the ICU 900 sells for $1,520 installed.
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 $750 and on the ICU 900 to $1,390 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.
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