T Safe Systems installs home security systems. Two of its systems, the ICU 100 and...
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Accounting
T 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 3 150/ea
Video monitors 1 1 75/ea
Motion detectors 5 8 15/ea
Floodlights 3 7 8/ea
Alarms 1 2 15/ea
Wiring 700ft. 1,100ft. 0.10/ft.
Installation 16hr 26hr 20/hr
The ICU 100 sells for 810 installed, and the ICU 900 sells for 1,520 installed.
Part 1
Required:
1. What are the current profit margin percentages on both systems?
2. T 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 profit margin percentages for both products at these price levels
3.Describe two ways that TARA could cut its costs to get the profit margins back to their original level.
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