BRIGHT GREEN -- Was Q1 2013's full PRODUCTION costs down to $1.37/gallon?
At least 54% of the COGS was from Q4 2012 inventory.
From the 10K:
"Inventories, which consist primarily of plastics, costs to process the plastic and processed fuel are stated at the lower of cost or market. We use an average costing method in determining cost."
Q4 2012 ended with $240,096 in inventories.
Q1 2013 P2O sales were $151,516.
Q1 2013 inventories increased $49,797.
That means total production and inventory was $201,313 or around 46% of the Q4 2012 ending inventory + Q1 2013 sales + increased ending inventory.
Interesting. Cost per gallon went from $2.09 in 2012 to $1.73 Q1 2013, with over HALF of the old costs "averaged" into that $1.73/gallon.
Unfortunately we don't know Q4's exact cost per gallon, only 2012's cost per gallon, but if we use that $2.09/gallon figure for Q4 2012, use 50% for simplicity for Q4 inventory and sales and 50% for Q1 inventory and sales, in order to achieve a reduction of .36/gallon in a single quarter, then Q1 2013's own production must have been twice that to achieve $1.73/gallon "average" or roughly $1.37/gallon.
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