TABLE F.1 Components of Manufacturer’s Suggested Retail Price (MSRP) Equivalent RPE: ANL Method

Cost Category

Cost Contributor

Relative to Cost of Vehicle Manufacture

Share of MSRP (%)

Vehicle manufacture

Cost of manufacture

1.00

50.0

Production overhead

Warranty

0.10

5.0

 

R&D engineering

0.13

6.5

 

Depreciation and amortization

0.11

5.5

Corporate overhead

Corporate overhead, retirement, health

0.14

7.0

Selling

Distribution, marketing, dealers

0.47

23.5

Sum of costs

 

1.95

97.5

Profit

Profit

0.05

2.5

Total contribution to MSRP

 

2.00

100.0

SOURCE: Vyas et al. (2000).

TABLE F.2 Components of MSRP: Estimated by Borroni-Bird

Cost Category

Cost Contributor

Relative to Cost of Vehicle Manufacture

Share of MSRP (%)

Vehicle manufacture

Materials

0.87

42.4

 

Labor, other manufacturing costs

0.13

6.3

Fixed cost

Transportation and warranty

0.09

4.4

Fixed cost

Amortization and depreciation, engineering R&D, pension and health care, advertising, and overhead

0.44

21.5

Selling

Price discounts

0.10

4.9

 

Dealer markup

0.36

17.6

Sum of costs

 

1.99

97.1

Profit

 

0.06

2.9

MSRP

 

2.05

100.0

SOURCE: As reported by Vyas et al. (2000).

TABLE F.3 Components of Retail Price Equivalent: EEA, Inc., Method

Cost Category

Cost Contributor

Relative to Cost of Vehicle Manufacture

Share of MSRP (%)

Vehicle manufacture

Division costs

0.72

33.6

 

Division overhead

0.14

6.5

 

Assembly labor and overhead

0.14

6.5

Overhead

Manufacturing overhead

0.22

10.3

 

Amortized engineering, tooling, and facilities

0.26

12.1

Selling

Dealer margin

0.49

22.9

Sum of costs

 

1.97

92.1

Profit

 

0.17

7.9

Total

 

2.14

100.0

SOURCE: EEA, Inc. (1995), as reported by Vyas et al. (2000).

TABLE F.4 Comparison of Markup Factors

Markup Factor for

ANL

Borroni-Bird

EEA

In-house components

2.00

2.05

2.14

Outsourced components

1.50

1.56

1.56

SOURCE: Vyas et al. (2000).



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