Prices of the cars

[clovisgr]

Hi,

How I know the real cost of the car?
   

[Eric.B]

There was recently help buttons added to this section in 1.18.7, in the world map. I'll append their information to the end although the data may be slightly different than 1.18.4.

In short, the "Unit Cost" is the Material Costs unit, the Factory Costs per unit, and the labor costs per unit. It's how much it costs to produce one unit.

The "Corporate Cost" is ALL of your costs (branch, admin, marketing, etc.) rolled into the "Unit Cost". This is how much you need to price your vehicles to make a profit. Assuming you sold (in 1.18.4) all the vehicles you produce and have in reserve. (In 1.18.7, it's just the vehicles you produce.)

So the "Real Costs" of your vehicle is the "Unit Cost". But if you sell for a dollar more than that, you will not make a profit because you will not cover your embedded costs from running your business. The more vehicles you produce, the closer "Corporate Cost" will be to your unit costs.

So in summation you use Corporate Cost as your pricing guideline for profitability. If you believe you're only going to sell 50% of the units you produce or have in reserve, then you would take the difference, $1981-$846 = $1135 and add this back into the corporate costs $1981 + $1135 = $3116. Meaning if you sold 50% of the vehicles produced and in reserve, your breakeven point per unit would be $3116...

Hopefully that clears it up for you, feel free to ask if you have any more questions.

Here are the help buttons in 1.18.7 on this topic:

Code:

This is the Unit Manufacturing Costs for each vehicle. This cost factors in only manufacturing costs of the selected vehicle. This is the break even point for manufacturing if you sold every unit manufactured unit this month. Here is a breakdown of how it is generated:
(Factory labor costs this month + base factory costs + production line costs + (vehicle unit costs * number of vehicles produced)) divided by number of vehicles produced.

Code:

This is the Total Corporate and Unit Cost per Unit. In short this is the break even price for the selected vehicle portion of cooperate expense IF you sold every vehicle you produce this month. (Including non selected vehicles.) This price only includes a portion of corporate expenses based on the amount of this vehicle you have compared to other vehicles. Let's break down how this is calculated:
Selected vehicle expense= (Factory labor costs this month + base factory costs + production line costs + (selected vehicle unit costs * number of selected vehicles produced)) divided by number of selected vehicles produced.        
Corporate expenses = This month's Lobbying, Administrative, Construction, RnD, Branch, Marketing, Labor, Racing, and Misc Costs
Break even price = Selected vehicle expense + (Corporate expense Divided by all vehicles built this month.)
This information will allow you to calculate break even prices even if you do not sell all your vehicles. For example, If you only sold half the vehicles you produced, then using the 'Unit Manufacturing Costs' you would double the difference between the 'Unit Manufacturing Costs' and the 'Corporate and Unit Cost per Unit' then add that back in to the 'Unit Manufacturing Cost' to find your new break even point.

[Preliator]

Hi, I haven't understood at 100%. In short, there isn't a fixed price to have a profit because I have to explain what I mean for "profit". I can decide to have a profit for every vehicles just setting the price 1 dollar more than "Unit costs" (or "Manufacturing Cost"?) but this can't cover the total expense of my business. If I sell only one model I have to set the price 1 dollar higher than "Corporate and Unit Cost" to cover my total expense and have a real profit of my business.

Viceversa if I sell 2 or more models is easier because I don't have to set the price of each model higher than the "Corporate and Unit Cost".

Is this right?

[WolveNZ]

Hi, I haven't understood at 100%. In short, there isn't a fixed price to have a profit because I have to explain what I mean for "profit". I can decide to have a profit for every vehicles just setting the price 1 dollar more than "Unit costs" (or "Manufacturing Cost"?) but this can't cover the total expense of my business. If I sell only one model I have to set the price 1 dollar higher than "Corporate and Unit Cost" to cover my total expense and have a real profit of my business.

Viceversa if I sell 2 or more models is easier because I don't have to set the price of each model higher than the "Corporate and Unit Cost".

Is this right?

To make a profit on any vehicle at any branch, the selling price must be higher than the corporate costs.

The corporate cost will decrease if you produce more cars/sell more cars

[Eric.B]

If I sell only one model I have to set the price 1 dollar higher than "Corporate and Unit Cost" to cover my total expense and have a real profit of my business.

Viceversa if I sell 2 or more models is easier because I don't have to set the price of each model higher than the "Corporate and Unit Cost".

It is as WolveNZ points out.

In 1.19 the names of these things have changed to hopefully make it clearer.

The unit costs are a fixed cost of materials of the vehicle. The Corporate costs are all other costs in running your business per vehicle produced.

So say your car's unit costs is $1000. And all other costs running the company is $1,000,000.

You build 1 car, then the Corporate and Unit Costs will be $1,001,000. You would need to sell your 1 car for $1,001,001 to make a profit.


Now lets say you build 1000 cars. The Unit Costs for that turn is still $1000, but the corporate costs per vehicle is $1,000,000 / 1000cars = $1000 per car.

So:
$1000 unit costs + $1000 corporate costs = $2000 per car.

You would need to sell all 1000 cars for $2001 to make a profit.

What if you only sold 500 cars?
You still spent $1,000,000 on corporate costs. But now you have to divide these numbers by 500. So
$1,000,000 / 500 = $2,000 corporate costs per vehicle + $1,000 unit costs = $3000 per vehicle sold to make a profit.

But wait! What if you built 1000 cars but only sold 500?

Simple. $1,000 unit costs * 1000 cars you produced = $1,000,000 + $1,000,000 corporate costs = $2,000,000 spent that turn

$2,000,000/500 number of cars sold = $4000 is your break even point for over production. (This is assuming you cover inventory cost now and not in the future sales, in which case the above $3000 would be valid as you will be selling the left overs for "free" the next turn.)




For a shorter answer, if you sell all the vehicles you produce, then the "Total Production Costs" are what you want to sell vehicles for. Double it for every half of vehicles you sell.

[jkemmery]

I have a question on how you calculate "Total Production Cost". Recently while playing a game, the "Total Production Cost" (I'll abbreviate as TPC) for each of my 12 or so models skyroketed after expanding to Asia and building a factory in Tokyo. My guess for this was that it was due to shipping, as I had the game set to auto production and global shipping. However, that is just a guess. Can you please explain how you go about calculating TPC for each model of car? Because it seemed that suddenly the TPC had jumped to about 5 times the Unit Cost once I expanded to Asia. Thanks.

[Eric.B]

I have a question on how you calculate "Total Production Cost". Recently while playing a game, the "Total Production Cost" (I'll abbreviate as TPC) for each of my 12 or so models skyroketed after expanding to Asia and building a factory in Tokyo. My guess for this was that it was due to shipping, as I had the game set to auto production and global shipping. However, that is just a guess. Can you please explain how you go about calculating TPC for each model of car? Because it seemed that suddenly the TPC had jumped to about 5 times the Unit Cost once I expanded to Asia. Thanks.

Read what was written in the posts above. It explains in great detail.


If you expanded into Asia, then you have to factor in all the construction costs of building each branch into the cost of each vehicle produced that turn. The next turn the TPC will decrease as you do not have to pay construction costs.

So, if you spent $100,000,000 to expand into Asia. And you built 10,000 cars. Then additional costs to break even for that turn just from building branches is $100,000 per car.

[jkemmery]

I have a question on how you calculate "Total Production Cost". Recently while playing a game, the "Total Production Cost" (I'll abbreviate as TPC) for each of my 12 or so models skyroketed after expanding to Asia and building a factory in Tokyo. My guess for this was that it was due to shipping, as I had the game set to auto production and global shipping. However, that is just a guess. Can you please explain how you go about calculating TPC for each model of car? Because it seemed that suddenly the TPC had jumped to about 5 times the Unit Cost once I expanded to Asia. Thanks.

Read what was written in the posts above. It explains in great detail.


If you expanded into Asia, then you have to factor in all the construction costs of building each branch into the cost of each vehicle produced that turn. The next turn the TPC will decrease as you do not have to pay construction costs.

So, if you spent $100,000,000 to expand into Asia. And you built 10,000 cars. Then additional costs to break even for that turn just from building branches is $100,000 per car.

OK, however, looking at your calculations above, they are only for one model of car. Are you dividing out the corporate costs per model? Because even with the expansion, the jump in TPC per model was excessive. Moreover, shouldn't any capital expenditures be taken out of working capital, and not be figured in to the profit cost per vehicle sold? I mean, that's how real corporations operate. It seems that you probably have some serious calculation errors in the program when you figure these costs. I understand the math above, but, I've worked for several large corporations and this is not the way they calculate profits. My point is that you may want to take a closer look at this, and play around with some scenarios to tweak your calculations. Capital expenditures should ONLY be taken from working capital, not figured in to unit costs. The reason for this is rounding errors. I'm 100% positive you have serious rounding errors in your calculations, and when a company grows to a global scale they compound. For example, I was selling roughly 100,000 vehicles per month on 5 continents. I was profitable until I expanded in to Asia and immediately began loosing money, after only opening 6 branches and 1 factory. I urge you to take a look at how you are going about calculating the profits and make an attempt to bring it in line with the way actual corporations work.

[Eric.B]

Corporate costs are divided into the number of cars produced, regardless of the number of different models.

Here is a line for line the actual code used to calculate the TPC:
http://steamcommunity.com/app/285110/dis...5138663557

Moreover, shouldn't any capital expenditures be taken out of working capital, and not be figured in to the profit cost per vehicle sold?

Then your cost per unit will be lower. People will their cars higher than that number. Sell all their vehicles, and still not make a profit. And they won't know how much they need to price the vehicles to make a profit.

I mean, that's how real corporations operate. It seems that you probably have some serious calculation errors in the program when you figure these costs. I understand the math above, but, I've worked for several large corporations and this is not the way they calculate profits.

There are hundreds of way to calculate "profits." TPC is just a simple Costs Per Unit for that month. You sell all your vehicles for more than that and you will turn over a profit for that month. No more, no less. Sure, capital expenses can be moved away from the Cost Per Unit. Accountants do this all the time to make things look profitable. But that doesn't change the break even amount needed for that time period.

That being said, TPC has no effect on the actual Profits/Loss in the game. It is just a very basic indicator at how much you have to price the vehicles to break even. If it's high after your branches/factories are done being built, then you have other expenses keeping it that high.

http://smallbusiness.chron.com/determine...80184.html

Capital expenditures should ONLY be taken from working capital, not figured in to unit costs.

Nothing is figured into the Unit Costs, The TPC is just telling you what you need to sell all your vehicles at to break even for that month.

The reason for this is rounding errors. I'm 100% positive you have serious rounding errors in your calculations, and when a company grows to a global scale they compound.

You can check the code in the link above. It's kinda hard to have rounding errors when it's a simple: ALLCosts/number of models produced) + unit costs...

If you want to double check, write down the number of cars you produce, multiply it by the TPC numbers you have (Remember Model A * Model A TPC + Model B * Model B TPC, etc) then see if that's higher than your expense numbers next turn.

I was profitable until I expanded in to Asia and immediately began loosing money, after only opening 6 branches and 1 factory. I urge you to take a look at how you are going about calculating the profits and make an attempt to bring it in line with the way actual corporations work.

That has nothing to do with TPC. TPC is just a guessimate at how much you need to sell your vehicles for to break even.

If your actual costs increase for more than 1 turn, then you have other issues. TPC does not effect costs or profitability of anything in the game.
Look at your expense reports in the reports and see if anything is much higher now. Or upload the save game(zip the file) and I'll look for you.

[jkemmery]

Thank you for explaining that. I appreciate you taking the time to do so. I love playing the game.