The Charismatic Building Company Limited The Charismatic Building Company Limited is a small housing development firm which has the capacity to build up to houses per year. This is a small amount when compared to the output of some of the other firms in the industry. However, this is typical of firms of that size in the market. The houses are large and of high quality, built to a standard design and the buyers will pay $150,000 for such houses depending on the location. The company is run by two directors as well as an administrative person. It has a small suite of offices, a workshop and a storage yard. The fixed costs of the business amounts to $240,000. All the work on the building site is done by sub-contract labour and the average wage bill for a house is $56000. Materials are bought in as required and amount to $42000 per house of which 25% are imported from overseas suppliers. The company owns a bank of land on which it will build houses for the next two years, and it estimates that the cost of the land per house will be about $25000. The directors are planning to expand the business, and the two options open to them are to make the business grow organically or to merge with, or take over other companies. However, there are issues associated with each option. a) Outline four (4) components that The Charismatic Building Company Limited would have considered before arriving at the demand forecast for houses.
The Charismatic Building Company Limited
The Charismatic Building Company Limited is a small housing development firm which has the capacity to build up to houses per year. This is a small amount when compared to the output of some of the other firms in the industry. However, this is typical of firms of that size in the market. The houses are large and of high quality, built to a standard design and the buyers will pay $150,000 for such houses depending on the location.
The company is run by two directors as well as an administrative person. It has a small suite of offices, a workshop and a storage yard.
The fixed costs of the business amounts to $240,000. All the work on the building site is done by sub-contract labour and the average wage bill for a house is $56000. Materials are bought in as required and amount to $42000 per house of which 25% are imported from overseas suppliers. The company owns a bank of land on which it will build houses for the next two years, and it estimates that the cost of the land per house will be about $25000.
The directors are planning to expand the business, and the two options open to them are to make the business grow organically or to merge with, or take over other companies. However, there are issues associated with each option.
a) Outline four (4) components that The Charismatic Building Company Limited would have considered before arriving at the
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