Matt - in that calculation you're not taking into account the costs of the recording studio (and possibly accommodation), the production team, any guest/session musicians (MU rate is a minimum of £114), mastering, graphic design - or even the cost of the ink. Some of us can do much of this ourselves of course, (but very few can do all of it, well) and even if we can, our recording and graphics kit has to be paid for. And if it's our job, then our own time should really be costed in as well.

Are your CDs actually CDRs? These sound much the same, but are not acceptable to some shops and radio stations because they don't play reliably in all machines. Fine for demos, as you say, but no good for serious 'product.' You may get CDs for that but I doubt it - glass mastering usually costs that much, and then you have the blanks and replication to pay for. There's also a problem with card and paper sleeves because they can get damaged before sale (damp CD tables caused by beer spills are the main enemy).

Even a fairly simple CD by a solo artist with no multi-tracking could cost up to a grand to record and master properly. My out-costs are more like £2-3k, and if I costed in my own time (I do my own graphics) it would be double that. Even at a tenner a pop it takes a good while to break even.

Tom