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20 SMT Magazine • April 2016 in the fixed cost allocation, I won't attempt to quantify them in general, but they must be con- sidered as a significant part of the total cost of manufacturing. Variable costs are subject to several varia- tions, but a little easier to analyze. Board sub- strate and components are obvious examples of variable costs. Although there are numerous types of substrate materials ranging from PET flexible to multi-layered FR-4, the value of the substrates range from $20 to $90/meter 2 accord- ing to a December 2015 Prismark report. A typi- cal solder paste test vehicle used to evaluate new pastes is 65 in 2 or 0.042 meters 2 on each side of the board. Approximately five grams of solder paste are used when printing on both sides of this densely populated test vehicle. Thus one data point indicates that five grams may be used per 0.084 meters 2 of substrate or 59 grams/ revenue and the sum of fixed and variable costs. If you have $750,000 in fixed assets (a printer, an SPI device, two or three chip shooters and a reflow oven) per SMT process line, and a rapid depreciation schedule (five years), your fixed costs would be $150,000/year. Next, you should factor in costs for manu- facturing space. Let's assume a low-cost loca- tion of 1,000 square feet and use a conservative estimate of $1/ft² of floor space. Manufactur- ing overhead is a common term for the labor required to manufacture assemblies. This is a more difficult cost to estimate, as different companies have varying head count per SMT line and wage rates determined by the local market. Each of these fixed costs needs to be am- ortized over the number of good assemblies produced. Because there are so many variables cosT vs. causE: WhaT is morE criTical To Ems ProfiTabiliTY? Figure 1: The solder paste printing process capability is critical to EMS profitability.

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