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 $13$ $ $150/$ea

Video monitors $11$ $ $75/$ea

Motion detectors $58$ $ $15/$ea

Floodlights $37$ $ $8/$ea

Alarms $12$ $ $15/$ea

Wiring $700$ feet $1,100$ feet $ $0\mathrm{.}10/$feet

Installation $16$ hour $26$ hour $ $20/$hour

The ICU $100$ sells for $$810$ installed, and the ICU $900$ sells for $$1,520$ installed.

Required:

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

$2.$ UR Safe$$s management believes that it must drop the price on the ICU $100$ to $$750$ and on the ICU $900$ to $$1,390$ 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.

Answer rating: 100% (QA)

To calculate the gross profit margin percentage we need to determine the cost and selling price for ... View the full answer