What makes a DAC so expensive?

I agree there is a bunch of hoop-la. There is some differences in sampling rates and such with Mac gen 2 dacs.  It had something to do with SACD sample rates, and the DACs ability to use ALL of it. 
Macs second gen Dac addresses that along with their, $$$$$$$$$$
Transports.
Someone will clear it up.. To rich for my blood. I'll stick with my (ES) Sonys, thank you very much. I love the bang for the buck and the house sound of the TWO, Sony and Mac..Gen 1 Dacs, both fine by me..

Regards

just to be clear, the USB input on the AXA25 and AXA35 are charging ports, and they do not contain an internal DAC...

Come on guys some of this is parts cost and quality also. A quality and purpose built chassis that reduces unwanted vibrations costs and takes engineering. Some use $250-$300 chokes from Lundahl and use 5 of them! Some use $15 resistors and $150 caps in key positions. Some use very high quality circuit boards. Some use high end trannys that can be very expensive.

Some use Opamps at $35 a pop. Some use the best wire at $4 - $10 foot. Some are hand made one at a time taking up to 5 days to complete. Just the power supply in a well made high end dac will have parts cost 100x the Topping dac. Now we can talk about the use of high quality input and output jacks, IEC and such. I could go on and on, but you get the point.

I have been thinking about the same thing.  You can easily buy a streamer with a built in DAC for less than the cost of a DAC.

But forgetting that, what seems odd is that a stand alone clock for the DAC often cost as much as the DAC with its built in clock, or streamer/DAC with its built in clock.  Reading between the lines, a number of clock purchasers' comments allude to a "incremental" improvement, and others don't sound quite sure there was any improvement.

Just my observation from reading here, no practical experience so I am open to being corrected.

Some simple rules around development, manufacturing, and marketing:

• All of the above have a fixed and variable costs associations.
• All costs increase exponentially for each gain beyond a certain baseline- picture a hockey stick- this includes development costs, manufacturing costs, and marketing costs. (someone will argue fixed do not, but for additional gains the expertise, techniques, equipment, and segmentation will  be more expensive and specialized.
• As you segment and specialize, the market shrinks exponentially, so absorption will need to be spread across fewer and fewer units; result price/costs goes up at a commensurate rate.
• The higher the price point-due to everything above- the greater the  curb appeal costs- increasing everything just discussed. Most people who will pay the highest end price point will also want the highest end window dressing and usability (think how well a Ferrari with the body design of a Yugo would sell).

All this adds up to the fact you can buy an adequate or even very good DAC for under a couple hundred bucks (maybe even less than $100)  that is in a nondescript metal case with minimal user conveniences. Every incremental advance beyond that the price will go up at a hockey stick rate. This is not unique to Audio.