O 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 ICU 100 2 1 2 4 5 760 ft. 20 hr ICU 900 4 6 1 2 3 1,140 ft. 20 hr Cost Data $ 121/ea $ 55/ea $ 17/ea $ 3/ea $ 18/ea $ 0.2/ft. $ 14/hr The ICU 100 sells for $970 installed, and the ICU 900 sells for $1,680 installed. Required: 1. What are the current profit margin percentages on both systems? 2. UR Safe's management believes that it must drop the price on the ICU 100 to $910 and on the ICU 900 to $1,550 to remain competitive in the market. Recalculate profit margin percentages for both products at these price levels and then compute the target cost needed for each product to maintain the current profit margin percentages. (For all requirements, round your percentage answers to 2 decimal places and other answers to the nearest whole dollar amount.) ICU 100 ICU 900 1. % % 2. Current profit margin Profit margin Target cost % % Caldwell Supply, a wholesaler, has determined that its operations have three primary activities: purchasing, warehousing, and distributing. The firm reports the following operating data for the year just completed: Activity Purchasing Warehousing Distributing Cost Driver Number of purchase orders Number of moves Number of shipments Quantity of Cost per Unit of Cost Cost Driver Driver 1,130 $ 163 per order 8,200 32 per move 630 93 per shipment Caldwell buys 101,300 units at an average unit cost of $12 and sells them at an average unit price of $22. The firm also has fixed operating costs of $251,300 for the year. Caldwell's customers are demanding a 12% discount for the coming year. The company expects to sell the same amount if the demand for price reduction can be met. Caldwell's suppliers, however, are willing to give only a 4% discount. Required: Caldwell has estimated that it can reduce the number of purchase orders to 810 and can decrease the cost of each shipment by $16 with minor changes in its operations. Any further cost savings must come from reengineering the warehousing processes. What is the maximum cost (i.e., target cost) for warehousing if the firm desires to earn the same amount of profit next year? Maximum cost Required: 1-a. Given the current number of customers per hour, what is the amount of excess capacity in the bar, dining room, parking lot, and kitchen? 1-b. Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26-day month). 2-a. Given the expected increase in the number of customers, determine if there is a constraint for any of the four areas of capacity. What is the amount of needed capacity for each constraint? 2-b. If there is a constraint, reduce the demand on the constraint so that the restaurant is at full capacity (assume some customers would have to be turned away). Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26- day month). Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Reg 2B Given the current number of customers per hour, what is the amount of excess capacity in the bar, dining room, parking lot, and kitchen? (Round intermediate computation of capacity to the nearest whole number.) Excess Capacity Parking (spaces) Bar (seats) Dining (seats) Kitchen (meals)
