*It seems to me that the finishing details of an instrument are where a lot of the manufacturing expense is. Body and neck construction for both would be the same and largely done by machine but then they would head different directions for finishing. The basic one would have some finish sanding, stain applied, maybe a few coats of sealer and that's it.
The more extravagant one would have a few hours of inlay work and then several hours worth of wood prep, finish, sand, finish, sand, finish, buff most of which would be done by hand and don't forget the additional cost of proper spray equipment, facility and meeting all proper EPA and other government agency requirements.
Keep in mind I am not defending their pricing by any means but this is something that I have thought about myself. Just look at the MM Sub line vs. MM US line or Fender Highway One vs. American Standard.