3 ms·

> management doesn't count engineering time the same way as parts cost because the IRS doesn’t either

• falcolas 7y ago
  When you count for the employment tax for every employee, it's not exactly cheap (around 30-35% of the base salary). The difference really is that whether the engineer is looking at the heating coil or not, the company is still paying them.
  • organsnyder 7y ago
    > The difference really is that whether the engineer is looking at the heating coil or not, the company is still paying them. And while they're looking at that heating coil, they're not doing something that could be generating more value for the company. But opportunity cost is extremely hard to measure.
  • techslave 7y ago
    no, the difference is whether the cost is allocated to fixed or overhead cost (presumably scaling slowly) or COGS (presumably scaling linearly). increase in COGS looks very bad for the business. https://www.investopedia.com/ask/answers/101314/what-are-differences-between-operating-expenses-and-cost-goods-sold-cogs.asp https://www.investopedia.com/ask/answers/101314/what-are-dif...
    • roland35 7y ago
      It certainly depends a lot on your quantities... if you are only making 100-200 of something a year then I think engineering time would dominate the calculation. But as with all things, it depends and you need to do the math for your own situation!