Cost Calculations
I learned about costs this way. When making a product, the price. That's it. So how much should the price be? I wouldn't know. I just calculated based on my own margin. Even that changed depending on the negotiation or how the conversation went. In other words, it wasn't a fixed list price. Isn't that how our industry works? If they like it, cheap; if it feels risky, expensive; small orders mean higher prices, bulk orders mean lower prices. That was about the extent of it. Everyone does it that way, right? I picked it up from my seniors too, so I had a feel for economies of scale and risk-based price fluctuations. The problem was that manufacturing was new to me, so I simply lacked experience. You could ask about that. Aren't Yeongcheon Farm and Shinan Farm manufacturing too? But the situation was different there—they proposed the price first. Twenty thousand won. Of course, that price only existed because Candle Bro's low temperature prevented new deals, which is why I opened the internet. To study.
Our Green Knowledge PhDs generally define cost accounting as a branch of accounting that calculates product costs. Is technical skill the key? Then how does cost calculation work? Theoretically there are the TOP method and the DOWN method, and the difference seems to come down to where you start.
The TOP method lets the consumer decide the price. In other words, "I'll pay this much, so sell it for that." If the supplier can deliver at that price, the price is formed. Huh? The invisible hand? I've heard that story somewhere. Conversely, the DOWN method decides the price by adding profit to the manufacturing cost. The supplier asks, "This is how much—want to buy?" and if the buyer agrees, the deal happens. I think the DOWN method fits our organization better. Or maybe not? Thinking about it, we probably need both. With Nakamura-san we have to start from the TOP method, but for the bluesunday we're developing, the DOWN method feels right. Let's think it through. We should price per gram, right? How much does it cost me to produce one gram of bluesunday? And what's the cost for the Japanese-market version? My head feels ready to explode. I have no idea how actual business owners handle this. I wrote down the big items one by one. First, labor costs, then overhead, and finally risk. Last time I saw the news, that Filipino uncle's family trip had seized goods worth about five hundred thousand won per gram, so let's peg ours around that level too. This number swings wildly depending on production volume and sales. The moment we achieve economies of scale, money is going to rain down on me. Make too little or buy and fail to sell, and we're looking at bankruptcy. I don't know. I'll just run a simple calculation and if it looks like we'll lose money, I'll say we can't do it. What else can I do? Since I'm apparently the boss and the pool has roughly a fifty percent margin, I'll set the same target for my new product. Let's price the main phenethylamine at about half the cost. The recipe yield is one in a hundred, so the per-gram unit price comes out to around one thousand two hundred fifty won. That's one million two hundred fifty thousand won per kilogram. At ton scale we're talking one billion two hundred fifty million won. With economies of scale, let's just ask for a billion. If we bring in one ton, we should theoretically get ten kilograms of product. At five hundred thousand won per gram that's five hundred million won per kilogram—five billion for ten kilograms. After factoring in risk, labor, and operating costs, it should work out. Medium and small business owners probably do the same.
I contacted Nakamura-san again, exchanged pleasantries, asked after the organization and his parents, and talked about the weather. Getting to the main point was still difficult. Etiquette first.
The impatient me threw it out first.
Master of push-and-pull, Nakamura-san. Since it felt like I was asking a favor, I wondered whether to push hard or keep it light for the sake of our future relationship. In moments like this, silence is golden. Time to poke again.
After waiting about five minutes, I threw a jab.
Of course. They were probably targeting roughly half margin too, so fifty thousand yen? Exchange rate around nine won per yen—that's about four hundred fifty thousand won. Hmm… close to what I had in mind, but we still had to negotiate. At times like this, better to play dumb than pretend to know.
From then on it was a contest of who would hold out longer or give in. We kept adding conditions.
The two of us—one trying to raise the finished-product price, the other trying to lower the raw-material price—threw everything we had into the discussion. It was a battlefield without knives. We agreed the transaction currency would be yen, finished-product price at sixty thousand yen per gram, and raw-material price at one hundred yen. No minimum import quantity. Truthfully, I had planned to push for fixed volume once I had confirmed clients and demand, but we hadn't developed the product yet.
A week later we delivered seven kilograms of product, equivalent to seven hundred kilograms. Including defects, seven hundred twenty kilograms went into the batch. The recipe was one in a hundred, but manufacturing yield turned out different from what I'd expected. I couldn't scold Minhee and her brother, who had worked themselves to the bone, for the defects. That was all on the boss. No—why add more ammonia after already diluting it? Maybe they felt guilty just playing around, because the moment I gave the order they pulled an all-nighter. I was grateful. Bought them something nice to eat.
When I told Nakamura-san the shipment was ready, the old man was genuinely surprised. He said he'd been planning on a two-month lead time. What kind of people are we? The deal closed cleanly.
The only problem left was the yen. Would I need a currency exchanger later? I didn't know.
After getting the Haman manufacturing plant back on track, Mincheol folded up his pizza board again and Yeoni studied the pharmacology notes I'd copied—no, photographed—for her. I was also enjoying the spring breeze while napping—no, thinking. Pure idleness. I am the idle one.
Ding~ Who is it. The one disturbing my peace.
Suddenly? I told you to lie low, didn't I? After the Russian fishing-boat incident I sent Manila bro to the Philippines and had been sending him minimum wage every month since—just enough to live on. Evacuating him should have been enough, but since he'd suffered a work-related injury I figured I at least owed him proper insurance processing.
After hearing Manila bro's story that began with "it's nothing else," I grew curious. Was this uncle a workaholic too? I sent him away to rest and he came back with a sales pitch. Manila bro said he was currently in Clark near Manila and that it was a goldmine. When I asked what made it a goldmine, he said it was a drug paradise. If you had the goods, the market was already secured. How could that be? Security there was terrible—you could get shot at the slightest mistake.
I'd already experienced how frightening local gangs could be. The ones I knew ran around with RPGs. I tried to dissuade him.
Truthfully, the authorities might not even know it was me, so maybe I should just tell him to come back. Still, out of worry I told him to stay six months.
The next part made me mutter that the world was truly small. While playing pachinko at the Clark hotel, he spotted someone familiar at a table. Wondering who it was, he approached and realized it was a prison buddy from the same cell. They greeted each other, asked the usual "what are you doing here," caught up, and eventually the topic turned to work. He asked if the guy was still in the business, they trashed each other's industries over drinks, got friendly, and while drinking the other man mentioned he was short on stock lately and let some information slip. No—why was the homegrown B2B saying there was no product in Southeast Asia? I smelled something and started questioning him like an interrogation.
The next words struck me straight in the chest—like a famous pro baseball player's fastball.
The sorrow of living as an outsider far from home.