I've always been curious about this myself so when I saw it posted I wanted to pass this info on.
From http://daviswiki.org/MP3s :
According to Moses Avalon's 1998 Book, Confessions of a Record
Producer, the proceeds of a then-$17 CD would typically be distributed
Retailer: $5 (29.4%),
Record label: $4.92 (28.9%),
Distributor: $2.40 (14.1%),
Giveaways: $1.80 (10.6%),
Duplication/recording: $1.10 (5.8%),
Artist royalty: 83 cents (4.9%),
Songwriter license: 60 cents (3.5%),
Producer royalty: 27 cents (1.6%),
Musicians union: 8 cents (0.4%).
These figures show two things: How little is spent on production and the artist, and how much
goes to the retailer and the record label, since the book was released,
the cost of physical CD production has plummeted due to advances in CD
mastering technology, as well as decreases in prices of the materials
used in CDs themselves. Indeed, a common CD package may cost somewhere
between six and 50 cents to produce, depending mostly on the amount
and quality of liner-material.
P.S. Just had someone email me this link, worth the read