GEZ PETROL CASE

1595 Words Dec 20th, 2013 7 Pages
COLLEGE OF BUSINESS

BKAL 3063 INTEGRATED CASE STUDY

FIRST SEMESTER 2013/2014 (A131)

LECTURE:
Pn. NORAZA BT MAT UDIN

CASE 6: GEZ Petrol Station: Using CVP Analysis for Planning

EXPIRE: 24 November 2013 (Before 10 a.m.)

GROUP A (7)

NAME
MATRIC NO
MARISA BT MUSRIL
GOH ING MIN
ELIZABETH ESTONIA ANAK JONIC
195468
205438
207727
NURLIYANA BT ZAINUL ABIDIN
WONG ZI XIN
207788
207877

Contents

1.0 Introduction Mr Aiman is the GEZ Bhd’s area manager who is responsible to directing sales activities for more than twenty petrol stations in the northern region of Malaysia. The petrol station business is very stable and consistent due to the continuous increase of the regions vehicles. But the petrol station
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The profitability of the business won’t be eroded if the Government raised the RON95 price to RM2.10. The profit margin where increase from 6% to 19.73% if the fuel price rose to RM2.10 when we did not consider others variable cost like credit card fee and royalty. The profit margin was as the calculation below.
Profit = Sales price – Cost = RM (2.10 – 1.6856) = RM 0.4144
Profit margin = 0.4144 / 2.10 = 19.73%
Even with the assumption all of the customers for RON 95 use credit card to make payment, the business still enjoy the profit margin of 18.73%. Based on the computation, the profit margin (18.73%) is still higher and much better than before (6%). Therefore, even though government raised fuel price and customers were using credit card to pay for the fuel, it won’t have significant effect on the profitability of the business. The calculation for the profit margin with assumption all of the customers use credit card to do payment was as below.
Credit card fee = 1% of sales price
Cost = RM 1.6856 + (1%*RM 2.10) = RM (1.6856 + 0.021) = RM 1.7066
Profit = RM (2.10 – 1.7066) = RM 0.3934
Profit margin = 0.3934 / 2.10 = 18.73%
On the other hand, based on Appendix 2 after consider all other variable cost like credit card fee, royalty, and with the assumption of fuel price did not increase. RON95’s contribution margin ratio was increase from
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