Exhibit B (Integrated Circuit Line)
Fixed Cost
Hong Kong US$/month
Singapore US$/month
(1)
Machinery, Equipment and Fixtures amortized over 5
years
10,600.00
7,100.00
(2)
Leasehold (rent) @ us
10.7/sq. ft./month
amortized over 20 years
2,100.00
1,400.00
(3) Other fixed overhead
45,500.00
31,000.00
Total
58,200.00
39,500.00
Note :- Items 1 and 2 above are cited on a monthly basis
having been amortized over five and twenty years
respectively. If these items were calculated on
the basis of initial capitalization required to
establish a facility capable of equal production
levels, the difference between a two-shift opera-
tion and a three-shift operation would be approxi-
mately US$1,560,000.00 for the entire production
facility and approximately US$240,000.00 for the
integrated circuit line only.
Conclusions :-
(1) Fairchild could reach identical production levels
with a three-shift operation with a Fixed Cost
savings of approximately US$800,000.00/year for
the entire facility or US$224,000.00/year for an
Integrated Circuit Production Line.
1