QUESTION $1$

Assume that you are a General Manager of a construction company. You were informed that the

construction industry is becoming very competitive because of the current economic scenario.

Your company has to find ways to cut the cost at site and at head office to remain competitive in

the market:$-$

a$)$ The accountant informed you that the company's overhead cost is around RM$1,600,000$

per year. The shareholders request that the company pay $10\%$ dividend for their

RM$1,000,000$ shares in the company. With the existing set up$,$ your company can only

undertake a total value of job not exceeding RM$25,000,000.$ Recommend to the directors

the average gross profit margin for each project to meet the company's financial obligation.

Assume that the company will be able to secure RM$20,000,000$ worth of job in a year.

$(10$ marks$)$

b$)$ Determine the profit and overhead markup for the company if it wants to maintain the

gross profit margin as in Question $1($a$)$

$(10$ marks$)$

c$)$ Your company has added profit and overhead mark$-$up of $10\%$ to the direct cost for one of

the jobs tendered last month. Your company's tender price for the job was RM $10\mathrm{.}0$ million.

The job was awarded to the lowest bidder with the price of RM $9\mathrm{.}0$ million. Explain why

this scenario happened. Show your calculation to enhance your explanation.