Exploring the Employee Knowledge of ABC Company as Basis for a Cost Optimization Framework

This study aimed to evaluate the costing framework of ABC Company, and focused on how direct and indirect costs, and mark-ups, were identified and allocated for renovation projects from 2023 to 2025. It also examined employees’ understanding of Full-Cost Pricing Theory and aimed to develop an improved costing framework to enhance accuracy and profitability. A qualitative research design was used for this study, which involved document analysis of thirteen (13) completed renovation projects and semi-structured interviews with key personnel, including project managers, estimators, and site supervisors. Data were analyzed using thematic analysis to identify patterns in costing practices and knowledge gaps related to full-cost pricing. The findings showed that the company’s current costing framework was incomplete and inconsistent, with indirect costs often under-quoted or omitted, and mark-ups applied using fixed percentages regardless of project complexity. These practices led to underquoted total costs and false assumptions of projected profits. Employees also showed limited and uneven understanding of full-cost pricing. They relied heavily on experience and focused more on direct costs rather than total cost inclusion. In response, the study proposed an Integrated Costing Optimization Framework. It includes a direct cost checklist, a duration-based indirect cost allocation system, and a category-based mark-up table. This framework improves cost accuracy, transparency, and consistency while remaining practical to use. The study concludes that adopting a structured full-cost pricing approach can improve financial performance, support better decision-making, and provide a more sustainable system for managing costs in renovation projects.