Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information Skip to question [The following information applies to the questions displayed below.] UR Safe Systems installs home security systems. Two of its systems,

Required information

Skip to question

[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 ICU 100 ICU 900 Cost Data
Video cameras 2 5 $ 134 /ea
Video monitors 2 2 $ 70 /ea
Motion detectors 5 2 $ 14 /ea
Floodlights 4 2 $ 5 /ea
Alarms 1 1 $ 19 /ea
Wiring 730 ft. 1,110 ft. $ 0.2 /ft.
Installation 10 hr 20 hr $ 17 /hr

The ICU 100 sells for $980 installed, and the ICU 900 sells for $1,710 installed.

Required:

1. What are the current profit margin percentages on both systems?

2. UR Safes management believes that it must drop the price on the ICU 100 to $940 and on the ICU 900 to $1,580 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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Theory Contemporary Accounting Issues

Authors: Thomas G. Evans

1st Edition

0324107846, 9780324107845

More Books

Students also viewed these Accounting questions

Question

What are the limitations of joint product cost allocation?

Answered: 1 week ago

Question

What Makes Machine Learning Projects Unique in HR

Answered: 1 week ago