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Good start, Glen. You need to understand accounting to get it simpler, and extract a valuable lesson. Manufacturing costs fall into 2 categories: Fixed and Variable. Fixed are Per Month, etc.; time based. Variable are materials, etc.; sold unit based. The break even point is where the Fixed plus the Variable costs Per Unit are less than the unit sales times the sales price Per Unit. Not at all complicated when you graph it out a couple ways. The hitch is that most airplane related things are associated with Huge Fixed Costs. I learned that when my brother and I had a Cessna 150 rented out to a flying club. And consider: Most airlines let their employees fly for free if there is room on the plane. It really does not cost the company anything, because by the time the plane is on the end of the runway, all the Fixed costs have been met. The marginal cost of the fuel per employee is astoundingly less than a raise! Percy in NM, USA -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] Sent: Thursday, February 09, 2006 5:01 PM To: Ercoupe Technical Discussion (moderated) Cc: Geoff (N23GD) Subject: [COUPERS-TECH] Re: Digest list: Ercoupe Technical Discussion (moderated) ----[Please read http://ercoupers.com/disclaimer.htm before following any advice in this forum.]---- Helmut You are a smart guy (as I have learned a lot from many of your posts), but I have to take issue with your spar pricing logic...here is why: You stated "I understand that Univair has the TC, owns the tools and jigs > and all they have to do is to assemble a main spar in the jig. > It should not cost over 6000 Dollars to do so. It needs no > certification or additional paperwork . I believe this price is > arbitrary and willfully set high by Univair." Let's use a business I was involved in as an example, school photography..... you know, pictures of kids taken every year in school. The company I worked for charged $20 for one 8x10 print. Customers often complained (like you did about Univair) saying "$20 for one 8x10, that's robbery, I can get an 8x10 at Walmarts for 89 cents!". What the customer did not know, and take into consideration, the company I worked for had to pay: 1. Over $50k a year for insurance premiums (in case a kid got hurt while being photographed) 2. Thousands in advertising cost 3. Thousands in payroll taxes 4. Thousands in a 401K program for employees 5. Thousands in utility bills...monthly! 6. Thousands in professional fees (accountants and attorneys) I could go on and on. ============================================================================== To leave this forum go to: http://ercoupers.com/lists.htm
