Originally posted by Clavius They do have more important things to focus on.
Perhaps adding 2000 special units is a way to keep volume up and lines running in slow summer months, pre-Holiday sales season.
2000 units x $1,300 = $2,600,000. On a cost accounting basis, sure, they have to allocate costs to these units. But on a cash-on-cash basis, what do the components and assembler compensation really cost?
Arbitrarily assuming 50% markup from the factory door through the distribution chain to retail price, Ricoh Imaging receives $,1,742,000 for 2000 units or $871 per unit. The distribution chain gets the rest of the $2,600,000.
Assuming the sensor, processor, shutter and other procured components cost $330, inventory cash-cost was $2.00 (to go get the parts off the shelf) of Ricoh-manufactured parts, assembly actually cash-cost $35 and the shell cost $4.00, Ricoh Imaging made $1,000,000 cash-basis doing this PE K-3.
Just a guess, but I'd bet $1,000,000 is a pretty standard target cash net for a special edition.
Last edited by monochrome; 07-24-2014 at 08:41 AM.