"Ron Todd" wrote in message
...
On Sun, 26 Sep 2004 06:44:06 -0500, Nick Zentena
wrote:

Ron Todd wrote:


Cost - Volume - Gross Profit functions are not that simple.
Sometimes, you can make a higher gross profit by lowering the price.

The problem is the fixed costs don't change any if they make 1 roll or
they make 1,000,000. Worse the equipment isn't likely able to handle small
production runs. They need volume not just for profit but to keep the
machines running.

Actually, fixed costs do change over large ranges in production
volume, as you can dump some of the costs as the enterprise contracts.
Many fixed costs are actually semi fixed costs over the wide range of
production volumes. [...]

My previous career was twenty years in MRPII database and analysis, which
neccessarily includes accounting structures, all coupled with an excellent
critical path prescedence modeling system; in otherwords deeply integrated,
and I can assure you that costing a product is very complex and certainly
variable. Nothing, but nothing is fixed. Each comment made to this issue so
far seems to be coming from those who speculate on incomplete knowledge in
the form typical of investors and middle management and corporate execs
involved largely in the show business of looking smart, acting stupid.

Let it go. What happens, happens and only business historians will care or
possibly understand. The rest is show business.