Kirk's Market Thoughts Message Board

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Non-Tech : Kirk's Market Thoughts

COHR 178.34

-10.2%

Dec 12 9:30 AM EST

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To: Kirk © who wrote (11396)	6/10/2021 4:31:50 PM
From: Sun Tzu	Read Replies (1) of 26766

I don't think they can do it that way if the idea is to sell at no profit. How would you calculate the cost while the revenue keeps falling due to people being vaccinated? The most logical way of doing it at no profit is to use one of two metrics: (1) I am producing x-million vaccines today and they cost me $Y-million. Therefore each unit costs me $Z and that is what I will sell it to you at. OR (2) I produced x-million vaccines and they cost me $Y-million. Ramping up the production to W units has increased my costs to $V. So pay me $V - $Y to even out the costs. Option 1 is more direct and straightforward and is also more profitable to the manufacturer (assuming they don't produce above their economic capacity). So I lean towards that being used. But option 2 is also possible. >> I believe you spread the SG&A over REVENUE not unit cost

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