Suppose the cell phone manufacturer Plum Electronics provides the following information for its costs last month (in hundreds of thousands):
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Salaries of telephone salespeople
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$ 4
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Transmitters
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$ 58
|
|
Depreciation on plant and equipment
|
55
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Rearrange production process to accommodate new robot
|
1
|
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Exterior case for phone
|
8
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Assembly - line workers' wages
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9
|
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Salaries of scientists who developed new model
|
11
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Technical customer-support hotline
|
3
|
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Delivery expense to customers via UPS
|
5
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1-800 (toll-free)line for customer orders
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|
Requirements
1. Classify each of these costs according to its place in the value chain (Hint : You should have at least one cost in each value chain function)
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Production
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R & D
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Design of Products or Processes
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Direct Materials
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Direct Labor
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Manufacturing Overhead
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Marketing
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Distribution
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Customer Service
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2. Compute the total costs for each value chain category
3. How much are the total inventoriable product costs?
4. How much are the total prime costs?
5. How much are the total conversion costs?