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 $830 and on the ICU 900 to $1,470 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.