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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: E.J. Neitz Jr who wrote (4326)	9/3/1998 4:11:00 PM
From: Hashem Akbari	Read Replies (1) \| Respond to of 6565

Variable cost is typically linearly proportional to production. Fixed charges are for keeping the plant operational. The model I used is a simple regression model of cost = c0 (fixed cost) + c1* RVNU When you fit this model to 8 Q of data, you get a cost of 62% to 63% for the range of new RVNU. Also, in my model, I did not include the lay off of 190 staff. At a cost of $80K/year, this will produce a saving of about $15M/year or about $3.8M/Q. Depending on the date of lay offs, we may have a savings of $2-3M for Q3. That is a potential of about $0.04-0.06 +tive surprise to the earnings. I mentioned this +tive surprise in my last posting. In summary, EPS W/O the +tive effects of layoff = $(0.05)-$0.02 EPS with the +tive effects of layoffs = $(0.01) - $0.06. Hashem