Cost Analysis Summary

As expected, the cost to prototype each of the 50 yoyos with the 2.008 process was much higher than the projected cost per yoyo if it were manufactured. This is shown in Table 1 below:

Table 1: Comparing Costs of Different Production Processes

	2.008 Process	Manufacturing Process
Material Cost	$1.47	$1.12
Tooling Cost	$1.25	$0.77
Equipment Cost	$1.36	$0.05
Overhead Cost	$67.59	$3.52
Total Cost	$71.67	$5.46

As seen above, the main cost for producing small volumes of yoyos as in the 2.008 process was coming from the overhead cost, leading to a cost that was almost 15 times higher for the 50 yoyos compared to the 50000. The major contributions to the overhead cost were from the cost of labor, energy to maintain the shop, and instruction time, which were high cost per hour items, but distributed over very few yoyos, leading to high yoyo costs. Equipment costs were also broken down differently for the 2.008 process as well since the equipment was not bought, but calculated using the run time on the machines instead. Otherwise, material and tooling cost was all fairly similar for both the prototyping and the manufacturing process, so little variation came from there. The overhead cost was the major contributor to the variation in the yoyo production cost by volume.

Figure 1: Yoyo Cost vs. Volume