Why would we exclude overhead?
In glassblowing, the materials are worth almost nothing. The fuel it takes to melt glass often costs more than the raw materials. The studio takes significant expense to operate and being a glassblower is a skilled position. Now and then people find out that the glass costs x amount a lb, and will say “bro it’s like $5 of glass why is this piece $150”... also ignoring the retail markup. The material costs have a fairly low influence on the price.
Yes, by employees, in a franchise, in a commercial building, with utilities, insurance and transportation costs attached.
We already established the chicken goop itself didn’t cost very much. I also don’t think they’re cooked in a microwave (deep fried, aren’t they?). Let’s see...
“all of our chicken products are raw and frozen when they arrive at our restaurants. Our crispy chicken, Junior Chicken patties, and Chicken McNuggets are par-fried to set the batter and immediately frozen by our supplier. The grilled chicken is cooked on our grill and the rest of our chicken products hit the fryers to cook before they reach your tray (or bag). ”
I recall famous chef / restauranteur, possibly Gordon Ramsay, giving a bare minimum sale price of 4x the raw ingredient price for profitability. Assuming the $0.06 estimate, $1.20 would imply a price of at least $4.80, pretty close to the $5.00 price
But McDonalds has much smaller overheads than other restaurants because the food is largely prepared and the prep work that does need to be done has been engineered to be easy
3-5% is the average profit margin for a restaurant. Also, the profit for the franchise owner is not the same as the total profit. McDonalds as a corporation is charging the franchisee licensing fees (and often rent as well), which should also be considered part of the profit.
Most things have a massive markup over raw material cost. Staff, property, marketing aren't cheap.
You aren't paying for nuggets. You're paying for convenience, you're paying for the brand.
In exactly the same way as the price of a google ad is completely unrepresentative of the actual cost to serve the ad. That isn't what you're paying for.
Interesting table. So except for the burrito mix at $5+ (why is that so expensive) the salads are most expensive ($4+).
Fries ($3+) are far more expensive than the burger buns (<$0.5)). Everything else is dirty cheap.
Do the bags specify how many servings they contain? My guess is that the salad is also expensive because it's about the only ingredient that can't be stored for the next 10k years without going off.
For me the rule of thumb here in SF is: even though I may only want 10 McNuggets, if there's anyone hanging around outside who looks like they'd appreciate some, get the extra 10 (for 2¢/each!) to give away. (It comes in 2 boxes.)
And that is exactly what they would like you to do. If you buy meat (or anything for that matter), mind your footprint, only buy what you actually need.
Is 'they' McDonalds, or the people hoping for a handout outside?
Why can't I buy what somebody else needs? (The recipients seem happy to receive the food, and though they'd probably prefer cash, I doubt they'd prefer just 20¢.)
Taking "giving immediate food to someone hungry and asking for food" as the baseline, what process improvement would you suggest over the $0.21-for-10-nuggets expenditure?
Or what the Frobeniusnumber is for given box sizes (ie, the largest number of McNuggets that you cannot buy (exactly). For the classical sizes of {6,9,20} it's 43).
You kid, but I recently found out that the Jack in the Box “2 tacos” are actually meatless. (I think... it was hard to get a straight answer out of the person I spoke to, but so far as I can tell they both “do not contain meat” and “are not vegetarian”)
I don't actually mind vegan food (a lot of Thai/Chinese dishes with tofu are very good), but meat substitutes are weak sauce IMHO. Don't try to make a better walkman - invent the ipod. Which in this analogy is Mapo tofu:
I was told on the phone something to the effect of: “the filling is a meat substitute made from wheat and milk protein. They do not contain meat, but they are also not certified as vegetarian”
“So there is no meat? So I can eat them during lent”
I do a similar cost comparison when eating pizza by determining how much bigger (more square area) the next size up is. If all you have is a non-scientific calculator, the trick was to divide the square of the radius of each pizza (since you are looking for the ratio of area, pi*r^2, and pi drops out). For example, if comparing 16" and 12", you just evaluate 8×8 / 6×6 = 1.7x bigger. Usually cost of the 16" is much lower than 1.7 the 12" so might as well get the larger size (and leftovers are fine).
It can be false economy of course because, leftovers or no leftovers, there's a strong possibility that'll you'll just eat more food than you would have otherwise. Food economy isn't a zero sum game.
I think in an economic sense I estimate the amount of utilization more pizza will give me, and once I know how much costlier the next size will be per square inch, only then I conclude if it's worth it or if "I'm not really hungry enough to pay _that_ much!"
Not sure if this still a thing in Canada (I haven't ordered pizza there for more than a decade), but my pet peeve was always the answer to the question, "How big is the medium pizza". "Eight slices". Drove me round the bend...
In practice the nugget per package gets cheaper as the package size increases and therefore a greedy algorithm is very useful and probably linear in the number of package types.
They changed from the assorted chicken parts (aka pink slime) to an all white meat recipe (aka tastes like nothing) in the early 2000's. They've refined the white meat recipe since then to remove chicken skin and artificial preservatives.
I had occasion to eat at a McDonalds in India in 2010 or so, and they still had the old recipe McNuggets and it was so much tastier.
So even though it's $5 for 20 which seems cheap... it's still only $1.20 in ingredients.
[1] https://www.quora.com/What-is-the-profit-margin-on-McDonalds...
[2] https://imgur.com/gallery/CvHqp6V