Traditionally, Santa Claus is the person making a list and checking it twice, but this year one company decided to turn the tables and have a little fun with numbers. Yes, Santa has been audited. ParenteBeard, a top 25 U.S. accounting firm, decided to balance the books of what would be the world's largest non-profit organization — Santa, Inc.
"With what's going on in the economy, with the fiscal cliff, we thought it would be a good idea to check in on Santa and see whether or not he had solid operations," says Jeff Ferro, president of ParenteBeard, in the attached video. "We found out he's got a pretty expensive operation."
In a short report "Santa, Inc: By the Numbers" the firms puts a $42.3 billion annual price tag on the entire North Pole operation. They broke down the numbers starting with the heart of the business.
Gift Production: $39.5 billion
Ferro says 90 — 95% of Santa's operation is gifts. Here's how ParenteBeard determined the costs: There are roughly 526 million kids under age 14 that celebrate Christmas. They estimated a $75 value for each gift.
"We didn't differentiate who's naughty and nice," says Ferro. "We just assumed everyone gets a gift." This costs Santa, Inc. an annual total of $39.5 billion.
Employee Costs: $2.77 billion
Of course, somebody has to make the gifts. ParenteBeard estimated there are 50,000 elves producing the goods. Since the average real life toymaker in the U.S. earns $35,859 a year, the firm assumed Santa would be more generous and pay his employees a $40,000 salary + $15,475 for healthcare costs.
Electricity: $98 million
How much power does it take to fuel Santa's busy workshop? ParenteBeard sized it up against the largest manufacturing plant in the world. Here's how they broke it down:
"Currently, the largest manufacturing plant in the world is 4.3 million square feet. Let's assume Santa's workshop is double that if he needs to provide toys to everyone in the world. That equals 8.6 million square feet of workshop space…The average manufacturing plant uses 95.1 kWh of electricity per square foot annually. The cost of electricity per kWh in the United States' northernmost city- Barrow, Alaska -is $0.12. If we apply those numbers to 8.6 million square feet, Santa would be looking at an annual bill of $98 million."
Reindeer Costs: $54,000
The math here was simpler. The firm found that the cost of caring for a horse is about $6,000 per year, accounting for food and veterinary care. So, tending to 9 reindeer —Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner, Blitzen, and Rudolph- would total $54,000.
"It's expensive, but the big thing is the magic," says Ferro. "We couldn't figure out how much the magic would actually cost."
Luckily for Santa, even after opening the books on the North Pole, his operations still remain a mystery.