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Gez Berhad

In: Business and Management

Submitted By dhya
Words 4155
Pages 17
TABLE OF CONTENTS
1.0 Introduction 1
2.0 Main Issues ….3
3.0 Analysis of Revenue, Fixed Costs, Variable Costs and Income Statement before adjusted 5

3.1 Revenue 5

3.2 Fixed Costs 6

3.3 Variable Costs 7

3.4 Income Statement 9
4.0 Case Questions and Answers 11

4.1 How lucrative is the petrol station business? 11

4.2 Since the margin on fuel business is very low (6%) compared to convenience store (20%), do you agree that the convenience store subsidizing the fuel business?.........................................................................................................13

4.3 If the government raised the RON95 price to RM2.10, do you anticipate the profitability of the business will be eroded? 15

4.4 If a credit card sale is reduced from 40% to 20%, what is the effect on overall profitability? ……16 4.5 What is the appropriate basis to allocate the cashier cost between the four products RON95, RON97, Diesel and SelesaMart................................................22.

4.6 Is utility cost fixed or variable? What difference does it make to the breakeven point of RON95 if it is classified as (i) fixed cost, and (ii) variable cost? 23
5.0 Conclusion 25

1. INTRODUCTION

GEZ Bhd which is a major oil company in Malaysia has been developed and operated the petrol stations under three basic concepts, which are namely Company Owned Station (COS), Partially Company Owned Station (PCOS) and Dealer Built Station (DBS). Basically, the operators of PCOS and COS were landowners themselves or those who are being nominated and agreed by GEZ. However, under the Dealer Built Station (DBS) concept, the operators were not the landowners.

GEZ petrol station conducted two main businesses which are the fuel business and the convenience store business. The fuel business sold three types of fuel

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