Unit Cost

"Cost." A hard concept to pinpoint. The fixed cost for stamping coffee mugs with swear words on them was a million bucks. Each mug's basic elements...the clay, the 5 minutes of labor to set it up, the electricity for the kiln...all in: 3 bucks.

But wait. Is 3 bucks the unit cost? What happened to the million dollar fixed cost for the factory to make and produce and distribute those mugs? Doesn't the cost of the factory get striated as unit cost? Sure, it does. If the company makes a million mugs while the factory is working, it cost a buck a cup, ignoring the finance costs. If they only do 100,000 mugs, it was 10 bucks a unit in factory costs, ignoring finance costs.

Yeah, that's the theme. The company could have done other things with that million bucks. Of note, the general stock market has gone up about 10% a year for the last 150-ish years. So think: $100,000 a year in capital cost on that million bucks. That's how it rolls.

So what swear word goes on the mug with those numbers, other than "Dayum"?