Answer these questions: Required information Problem 13-38 (Algo) Target Costing in a Service Firm [LO 13-1] [The

Answer these questions:

  

 

 

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Required information Problem 13-38 (Algo) Target Costing in a Service Firm [LO 13-1] [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 4 ICU 900 2 Cost Data $103/ea. 4 4 2 5 2 4 4 670 feet 13 hour 3 1,070 feet 23 hour $ 20/ea $ 11/ea $ 3/ea $ 10/ea $ 0.1/feet The ICU 100 sells for $840 installed, and the ICU 900 sells for $1,550 installed. $10/hour Part 1 (Algo) 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 $780 and on the ICU 900 to $1,420 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. Required information Problem 13-38 (Algo) Target Costing in a Service Firm [LO 13-1] [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 4 ICU 900 2 Cost Data $103/ea. 4 4 2 5 2 4 4 670 feet 13 hour 3 1,070 feet 23 hour $ 20/ea $ 11/ea $ 3/ea $ 10/ea $ 0.1/feet The ICU 100 sells for $840 installed, and the ICU 900 sells for $1,550 installed. $10/hour Part 1 (Algo) 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 $780 and on the ICU 900 to $1,420 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.