I asked them if that alone was worth the $300 retail price difference. They admitted that that alone isn't $300-$400 difference. He mentioned that it was less labor. Well, to me, that means quality control, inspections, machining of parts, etc...
Not sure who you talked to, but I doubt that he was from the accounting group. I can see the following savings in the Sport, none of which affect the functions that I need:
1. Melonite treatment is cheaper than chrome lining the bore and chamber.
2. Melonite treatment treats the entire barrel, both interior and exterior. When you chrome line a barrel you have to also parkerize or otherwise treat the exterior of the barrel. That cost is eliminated with melonite treatment.
2. Smith already had the melonite treatment capacity because it uses that process on its pistols. No new capital investment means no amortization cost added to the per unit cost by the bean counters.
3. The exterior of the barrel is smooth, rather than an M4 profile with grenade launcher cutouts. Lower machining costs to machine the barrel.
4. No dust cover means lower costs to machine the upper.
5. No dust cover means no cost for those parts.
6. No dust cover means no labor cost to install the cover.
7. No forward assist means lower machining costs to machine the upper.
8. No forward assist means no cost for the forward assist parts.
9. No forward assist means no labor cost to install the forward assist.
10. Integrated trigger guard means no cost to make or purchase the lower hinge.
11. Integrated trigger guard means no cost to install the hinge.
12. No acquisition, inventory, handling or storage costs for the eliminated parts.
13. Lower unit cost means higher sales volumes, justifying lower per unit margins, especially with no new capital investment to amortize.
14. Higher sales volume means less carrying cost per unit because the rifles spend less time on the shelf.
That's fourteen cost saving items for the Sport without having to lower the quality of the materials used, fit and finish or QC.
Considering all of the known cost savings items, I don't think that you need to assume other cost cutting measures to explain the per unit cost.