Replies to post #199143 on Plastic2Oil Inc (PTOI)

[pennybuffet]

I believe the most important thing to look at are those cost that are fixed or flucuate slightly with increased production. Obviously if many more machines can be run by a fixed number of employees than that cost wouldn't increase directly with production. Many of the other cost that are included in COGS would be calculated the same way. So just because current figures only show a 25% gross margin doesn't mean that by increasing production those figures wont change, I believe that if sales doubled you could possibly see gross margins around 40% or greater. Of course their is a threshold that once reached would reduce margins with increased production but that would have to include added more workers and perhaps acquiring more property plant and equipment.