5 ms·

But that reflects an ignorance of how cost accounting works. Sure, it might include $400 of parts, but a hell of a lot of R&D, equipment, labor, and overhead ar

by pwned1 5y ago

But that reflects an ignorance of how cost accounting works. Sure, it might include $400 of parts, but a hell of a lot of R&D, equipment, labor, and overhead are amortized into that phone. A very cursory look at Apple's latest income statements shows that the net profit margin on their revenue is about 20%, meaning that the phone's actual cost to produce is somewhere around $1200 (assuming a $1500 retail cost).

londons_explore 5y ago
Yes, but will you be the one to explain that cost accounting to each buyer? "Yes Maaam, we'll spend $200 of the money you're about to give us on a fancy campus with hammocks to try to attract good engineers. Oh, and the massive billboard outside that made you walk into the shop in the first place."
- lizardmancan 5y ago
  $1 for labor > For the effect to work, the cost disclosure must be voluntary, not forced (e.g. by regulation). A logical conclusion from the study.</sarcasm>
- HeyLaughingBoy 5y ago
  TBH, I've consistently found that "average people" have a better intuitive understanding of costs/profit than the average engineer. That may sound strange, at least it does to me, but I've noticed it for as long as I've been in this profession.
  - Cederfjard 5y ago
    How has this manifested itself? Where do you see that engineers tend to go wrong?
    - HeyLaughingBoy 5y ago
      This was not an easy question to answer :-) I guess what I've noticed is that although if you pressed them, engineers (across a range of fields) understand that businesses need to generate a healthy profit to stay afloat, they still seem to be uncomfortable with the idea of "profit" at all. And they seem to be surprised when you bring up the question of "how will you make money from that?" Whereas the "general public" tends to think of it with an approach of "make as much money from it as you can because it might not last." I know that's not a very good description but it's the best I can do at the moment.
  - EricE 5y ago
    Yes - I was listening to a tech podcast and they thought that Apple earned 20% on the accessories and products from other companies that they sell in the physical Apple stores. It was cringeworthy.
HeyLaughingBoy 5y ago
[deleted] Responded to wrong person.

by pwned1 5y ago

londons_explore 5y ago

Yes, but will you be the one to explain that cost accounting to each buyer? "Yes Maaam, we'll spend $200 of the money you're about to give us on a fancy campus with hammocks to try to attract good engineers. Oh, and the massive billboard outside that made you walk into the shop in the first place."

lizardmancan 5y ago
$1 for labor > For the effect to work, the cost disclosure must be voluntary, not forced (e.g. by regulation). A logical conclusion from the study.</sarcasm>
HeyLaughingBoy 5y ago
TBH, I've consistently found that "average people" have a better intuitive understanding of costs/profit than the average engineer. That may sound strange, at least it does to me, but I've noticed it for as long as I've been in this profession.
- Cederfjard 5y ago
  How has this manifested itself? Where do you see that engineers tend to go wrong?
  - HeyLaughingBoy 5y ago
    This was not an easy question to answer :-) I guess what I've noticed is that although if you pressed them, engineers (across a range of fields) understand that businesses need to generate a healthy profit to stay afloat, they still seem to be uncomfortable with the idea of "profit" at all. And they seem to be surprised when you bring up the question of "how will you make money from that?" Whereas the "general public" tends to think of it with an approach of "make as much money from it as you can because it might not last." I know that's not a very good description but it's the best I can do at the moment.
- EricE 5y ago
  Yes - I was listening to a tech podcast and they thought that Apple earned 20% on the accessories and products from other companies that they sell in the physical Apple stores. It was cringeworthy.

HeyLaughingBoy 5y ago

[deleted] Responded to wrong person.