Cost 2

Front 1

Merton Truck Company

Back 1

• Constrained linear optimization problem
• Sensitivity analysis
• Two truck models with different manufacturing
requirements
• Various constraints: engine assembly hours, metal stamping
hours, Model 101 and 102 assembly hours, Non-negativity
production constraints

Front 2

FinePrint Company

Back 2

Cost relevance, cost behavior, capacity constraints, opportunity costs
• Capacity: 150,000 brochures a month
• Special order of 25,000 brochures at $10 per 100 brochures
• Outsourcing opportunity at $8 per 100 brochures for up to
30,000 brochures

Front 3

Reichard Maschinen Case

Back 3

Relevance of sunk costs, variable costs and fixed costs
• Reichard sells grinding machines
• Steel rings are a standard component of these machines
• New plastic rings can replace steel rings
• Plastic rings are more durable than steel rings
• Plastic rings are less costly to produce

Front 4

Boston Creamery

Back 4

• Jim wants Frank to break down the favorable sales volume
variance into the part attributable to
• Sales mix
• Market share shift
• Market size change

Front 5

Wendy's

Back 5

• Determining chili‘s profitability
• Costing of Wendy‘s chili
• Problem: much of the meat used in making chili comes
from overcooked hamburger patties that cannot be
served to customers as hamburgers

Front 6

Sheridan Carpet Company

Front 7

Ryanair

Back 7

• Assess Ryanair‘s initial launch strategy
• Since 1985 Ryanair had operated a 14-seat turboprop
between Waterfront (Ireland) and Gatwick Airport
(near to London)
• In 1986, Ryanair announced that it would soon
commence service between Dublin and London (Luton)
• For the first time, Ryanair is going to face Aer Lingus
and British Airways (BA) on a major route
• the wisdom of the Ryan brother‘s launch strategy and
• the likelihood of withering retaliation from Aer Lingus and BA
• Analysis of the two topics are inevitably intertwined: one‘s critique of the strategy depends a great deal on the response one expects from the incumbents