Ahmed constructs buildings in Abu Dhabi. Ahmed was approached recently by a customer regarding a potential project, and he submitted a bid of $967,600, derived as follows: 

         

Land	$160,000
Raw materials	200,000
Labor costs	240,000
	$600,000
Construction overhead—25% of direct costs	150,000
Allocated corporate overhead	70,000
Total cost	$820,000

         

Ahmed adds an 18% profit margin to all jobs, computed on the basis of total cost. In this client's case the profit margin amounted to $147,600 ($820,000 x 18%), producing a bid price of $967,600. Assume that 70% of construction overhead is fixed. If Ahmed has more business than he can handle, how much should he be willing to accept for the home? Why?