Saturday, September 26, 2009

McDonald's Sandwiches

McDonald’s, my favorite source of fast-food based breakfasts, currently has their Sausage McMuffin on sale for $1. This would be very good for me, except for one problem, I really enjoy the Sausage McMuffin with Egg sandwich much more than its eggless cousin. The Sausage McMuffin with Egg sandwich is still priced at $2.49 (or $2.59 at some locations around here), that’s $1.49 simply for an egg fried into the shape of a patty. That’s roughly half the price of a dozen free-range, organic, large, AA grade eggs from Amazon Fresh.

Being my usual, frugal self I asked how much it cost for the egg patty by itself. Those are 65¢. So I ordered a few of the $1 Sausage McMuffins and an equal number of egg patties. I saved 84¢, plus tax, per sandwich just by adding the egg myself.

McDonald’s would be making 84¢ additional profit by paying an employee to put that egg on my sandwich. Assuming a very slow employee takes 15 seconds to get an egg from the warming box and place it on a sandwich, and that employee has no other job requirements during the breakfast rush, that egg placer would be generating $201.60 in value per hour, minus the cost of the eggs and the local minimum wage as their pay.

Me, with experience working in very high-volume, fast-food production could probably do that egg placement in 3-4 seconds, generating 4-5x the value per hour. If they were to offer me $100 per hour I could probably bring myself to inserting myself in the machine known as the McDonald’s kitchen. Sadly, I do not believe there are any fast-food restaurants in this area that receive the volume of business required to keep me completely busy during the breakfast hours.

This is not an endorsement of McDonald’s as either a healthy meal option, nor as a good value for your money. Their breakfast food merely tastes good to me, and therefore I am writing about my experience.

Sunday, September 13, 2009

Who Profits When You Buy Gas?

How much money does the oil company make per gallon of gas sold? Let’s find out.

For this calculation I am using ExxonMobil, since I have their 2008 annual report sitting on my desktop at the moment. In 2008, ExxonMobil had total revenues of $477.36 billion. Of that, they paid $36.53 billion in taxes (≈7.65%) and had net profits of $45.22 billion (≈9.47% margin). Using these figures, we’ll calculate the profit on the average gallon of gas sold in Washington State assuming the sale cost is $2.999 per gallon.

Assuming we buy one gallon of gas for $2.999 at an ExxonMobil gas station:

18.4¢ is paid to the Federal government in fuel taxes
37.5¢ is paid to the State of Washington in fuel taxes
I do not believe we pay sales tax on top of the fuel tax (I could be wrong), and I am assuming no additional, local taxes are added to the bill.
After these taxes are subtracted from the original $2.999 sale, ExxonMobil keeps $2.44 per gallon. They then pay an average of $0.187 in state and federal taxes on that revenue, the 7.65% calculated above. ExxonMobil will spend $2.253 per gallon in operating expenses; drilling or buying crude oil, refining the oil into gasoline, transporting to the gas station, operating the gas station, etc. That leaves the 9.47% margin calculated above, or $0.231 per gallon.

When the governments make more than three times as much per gallon of gas as the oil company does, I think we have a problem. The government isn’t doing the work, yet they are receiving the most financial benefit. I see a problem that must be corrected. And the inmates that are currently running the asylum think the "evil" oil companies aren't paying their fair share? What is "their fair share"?

Thursday, September 10, 2009

More Cheap Eats

Although getting good prices on groceries is always rewarding, it doesn't beat getting fresh produce from your own garden. Whether you have a large garden in your yard for growing, or grow plants in pots by the window, anyone can garden. Fresh veggies from your own garden also contain no synthetic fertilizers or pesticide residues, unless of course, you added them yourself.

A quick guide to maximize your garden harvest can be found here.