Question
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
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 | 1 | 4 | $ | 133 | /ea | ||||
Video monitors | 1 | 1 | $ | 75 | /ea | ||||
Motion detectors | 3 | 2 | $ | 15 | /ea | ||||
Floodlights | 4 | 2 | $ | 6 | /ea | ||||
Alarms | 1 | 7 | $ | 20 | /ea | ||||
Wiring | 720 | ft. | 1,160 | ft. | $ | 0.1 | /ft. | ||
Installation | 12 | hr | 22 | hr | $ | 16 | /hr | ||
The ICU 100 sells for $990 installed, and the ICU 900 sells for $1,700 installed.
Part 1
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 $930 and on the ICU 900 to $1,570 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.)
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