I was wondering this after the 58 lbs of pennies thread.

First the metal has to be purchased. Dies have to be made, and machines built to mint the coins. Direct labor has to be paid (the people who actually make, count, transport, and distribute the pennies) and then indirect labor (administration). All of this has to be distributed over the number of pennies made (probably many millions) and them amortized over the life of each penny (which must be quite long, on average--the random change in my pocket includes pennies from 1912).

Does it cost more than a penny to make a penny?

All coins cost less to make than they are worth. How much less is an interesting question. We should try looking on the US Mint web site, but I haven't done that yet.

The current composition is 97.5% zinc (by mass, I think) and 2.5% copper.

Like gold prices, other metal prices fluctuate.
Looking at the most recent prices available on the London Metal Exchange's web site (and using the current 2.5 g/penny):
$2,820/tonne copper -> $0.00018/penny
$959/tonne zinc -> $0.0023/penny
for a total material cost of $0.0025/penny (of course, the US Mint probably doesn't buy off the London Metal Exchange, but this gives us an idea of the cost, at least).

Not sure about the manufacture and distribution costs, but they need to be below $0.0075 per coin to keep the total cost under a cent.

This message has been edited. Last edited by: methos,

No surprise - the US Mint has an answer to this question - they say it's $0.0081/penny. - or was in 2000.

I wonder if that is taking into account the direct and indirect labor over time, or if they don't assign costs by product. It doesn't say. I'll have to post this question to my professor

And there's a word for it, too

seigniorage

And there are different types, too. See:

here for details.

That was facinating decal! Thank you for sharing that.

I wonder, does that apply to the US Mint? I mean, they are funded by the government, so they don't (I'm trying to think how to say this) "sell" the money. Like, you don't bring a pound of nickle to the Mint and get back nickles.

I'm confusing myself lol!

According to yesterday's Parade magazine, Marilyn vos Savant says it costs $0.098 to make a penny.

This a quote from an article I found online that seems to indicate that the cost is a lot more than some of the other replies here.

"This week the cost of the metals in a penny rose above 0.8 cents, more than twice the value of last fall. Because the government spends at least an additional six-tenths of a cent above and beyond the cost of the metal to make each penny, it will lose nearly half a cent on each new one it mints."

The full article is at:
http://www.azcentral.com/offbeat/articles/0422pennies0422.html

Welcome to AnswerPool mikeef, and thank you for taking the time to help with this topic. Please do post in other threads if you have information; or start a new topic if you have a question of your own.