The type of wood: Traditionally cedar wood is regarded as the top quality wood. 

The quality of the wood: Californian Cedar slats are supplied in different quality grades. Grade 1 is the highest quality. The straightness of the grain and dryness of the wood are examples of the quality factors.

The purity of raw materials (graphite, clay etc.): Processes which take extra time or extra thorough cost more. The more purification the higher the impact on cost.

The number of coatings of lacquer: The more coatings a product has, the greater the number of passes through the machine, the greater the cost in materials and time.

The number of identification lines printed on the side of each pencil: The extra finishing requires extra origination work which has a cost. 

The end of each pencil (plain cut, dipped once, dipped twice or more, rubber-tipped): To simply cut the end of a pencil is quick and easy compared to the time and cost of additional processes to improve visual appearances and quality.