Mississauga Essay

2952 Words12 Pages
RELEVANT COST CASES: Problem 1: Judson Company Judson Company makes widgets and wangles, both of which use a polishing machine as part of production. The widgets and wangles have the following price and cost characteristics: | |Widgets |Wangles | |Annual Capacity |1,000 units |2,000 units | |Price per unit |\$50 |\$100 | |Variable Cost per unit |\$20 |\$50 | |Annual fixed costs |\$10,000 |\$10,000 | |Polishing machine hours per unit |1 hour |2 hours | The polishing machine can operate for a total of 3,000 hours during the year. a. What product mix creates the most profit for Judson Company, given all the constraints? b. If there were only machine hour constraints what product mix would create the greatest profit mix for Judson? Problem 2:News.com News.com is a Web site that offers users access to current national and international news stories. News.com doesn’t charge users a fee for accessing the site but charges advertisers \$0.05 per “hit” to the Web site, which is a user who logs on. The user’s e-mail address is also provided to the advertiser. News.com is considering tow alternate internet service providers (ISPs), NetCom and Globalink, that will link News.com’s computer system to the Internet. These firms are identical in terms of access speeds and number