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<blockquote data-quote="pauldanieljohnson" data-source="post: 7774020" data-attributes="member: 6871928"><p>To a certain extent, yes. But it's important to remember that printing costs are only a fraction of product cost. Particularly when you have a larger publisher with multiple products, there is a lot of accounting work that goes into determining how overheads are allocated to product lines and specific products.</p><p></p><p>Say, for example, in a particular year you released 3 hardcover books, 4 paperback supplements, and 1 boxed set for 2 separate product lines. You've got a staff of 25: 3 of them work exclusively on product line A; 2 of them work exclusively on product line B; the rest work on either as they need to. Your annual payroll costs amounted to $2.66M, split across 5 departments. The boxed set involved 22 staff members, although some worked on it almost full time while some just helped occasionally. It was in development for 14 weeks. Hardcovers are in development for about 12 weeks on average, although the staff involved always work on other projects at the same time. 11 staff worked on the first hardcover book. 9 staff worked on the second. 9 also worked on the third, but it took considerably more time in editing because of significant content issues. The paperbacks typically take less labour, using 4, 3, 4, and 5 staff respectively, although two of the books were in development for about 7 weeks, one took 6 weeks, and one took 11 weeks. Senior staff oversee all projects, but the amount of time invested in each is highly variable.</p><p></p><p>So what was the overhead payroll cost of each product? Once you've got that figured out, we'll move on to the other dozen or so sections of the P&L. Then we can look at direct costs (like printing) and determine the extent to which each product was profitable, or not.</p></blockquote><p></p>
[QUOTE="pauldanieljohnson, post: 7774020, member: 6871928"] To a certain extent, yes. But it's important to remember that printing costs are only a fraction of product cost. Particularly when you have a larger publisher with multiple products, there is a lot of accounting work that goes into determining how overheads are allocated to product lines and specific products. Say, for example, in a particular year you released 3 hardcover books, 4 paperback supplements, and 1 boxed set for 2 separate product lines. You've got a staff of 25: 3 of them work exclusively on product line A; 2 of them work exclusively on product line B; the rest work on either as they need to. Your annual payroll costs amounted to $2.66M, split across 5 departments. The boxed set involved 22 staff members, although some worked on it almost full time while some just helped occasionally. It was in development for 14 weeks. Hardcovers are in development for about 12 weeks on average, although the staff involved always work on other projects at the same time. 11 staff worked on the first hardcover book. 9 staff worked on the second. 9 also worked on the third, but it took considerably more time in editing because of significant content issues. The paperbacks typically take less labour, using 4, 3, 4, and 5 staff respectively, although two of the books were in development for about 7 weeks, one took 6 weeks, and one took 11 weeks. Senior staff oversee all projects, but the amount of time invested in each is highly variable. So what was the overhead payroll cost of each product? Once you've got that figured out, we'll move on to the other dozen or so sections of the P&L. Then we can look at direct costs (like printing) and determine the extent to which each product was profitable, or not. [/QUOTE]
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