On 12/04/2012 02:46 PM, scott wrote:
>> Now, do you mean "the company made 15% profit", or do you mean "each
>> time the company sells 1 car, 15% of the sale price is profit"?
>
> The company made 15% profit. Given they only sell cars, on average each
> car will make 15% profit also?

Well, I guess it depends on what you define as "profit". I was thinking 
in terms of the sale price minus the cost of making the thing. Ferrari 
no doubt also have other fixed overhead costs not related to any one 
specific car, which they still also need to pay for. I'm sure 
accountants have more precise terms for describing these things.


>>
>> Really? You can buy an actual Ferrari for that amount of money??
>
> http://www.carpages.co.uk/guide/ferrari/

Hmm. That still seems awfully low for the most expensive brand of car in 
the entire world...

> Apart from the cost of the cars used in testing, yes the procedures and
> equipment will be the same. The cost of destroying 10 Ferraris when you
> only plan to sell a few thousand of them is going to push up the per-car
> price noticeably though...

Seems reasonable.

>> As I understand it, set-up cost is usually very large. So if you
>> manufacture more units, the set-up cost is divided between more units,
>> so the /per unit/ price is lower. Presumably the actual set-up cost
>> itself is identical in both cases.
>
> Probably even more expensive for the cheap cars, because you will need
> all sorts of robots and assembly lines to keep the per-car cost down.
> For the Ferraris it is simply too expensive to get such sophisticated
> equipment, much cheaper per-car to just do the process by hand, but
> still many times more expensive per-car than one mass produced in a
> highly automated factory.

OK.

>> There are things like CDs which cost virtually nothing to manufacture,
>> but still cost a lot to set up. So the set-up cost is virtually the
>> entire cost.
>
> Sure, but if you were to make 5000 CDs a year in your basement, the
> per-piece price of making the CDs is going to be huge, even if your
> set-up costs would be tiny compared to the big factories.

I tell you what, if somebody even managed to pull that off in the first 
place, even if they only made one single usable CD, I'd still be pretty 
impressed. :-D Yeah, that ain't gonna be cheap though. ;-)

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