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Requirements 1, 2 and 3. Classify each of these costs according to its place in the value chain. Within the production category, break the Manufacturing Overhead. Then calculate the total cost for each value chain category. (Enter amounts in millions. If a box is not used in the
Expert Answer
Kiwi Electronics Value chain cost classification: Amount in millions
| Cost | Reasearch and Development | Design | Direct labour
(production) |
Direct materials
(production) |
Manufacturing overhead
(Production) |
Marketing | Distribution | customer
support |
| Delivery expenses | $8 | |||||||
| Salaries for sales people | $3 | |||||||
| Chipset | $58 | |||||||
| Exterior case of phone | $9 | |||||||
| Assemble line workers wages | $9 | |||||||
| Tecniqual customer support | $6 | |||||||
| Depriciation on plant and machinery | $75 | |||||||
| Reaarengement of production process | $6 | |||||||
| Toll free for customer orders | $5 | |||||||
| Salariers for scientists who developed new model | $14 | |||||||
| TOTAL | $14 | $0 | $9 | $58 | $90 | $3 | $8 | $11 |
1.Delivery expenses are incurred in the process of distribution of the products to the customers, so delivery expenses comes under distribution
2.Salaries to the sales persons are paid for promoting or marketing the product, so salaries to sales persons comes under marketing costs
3.Chipset cost comes under direct materials as the chipset is the direct material which is used in the production of electeronic items
4.Exterior case of phone cost comes under manufactig overhead
5.Assembly line workers wages are paid to the workers of production department as they will assemble the spare parts
6.Tecnical support cost comes under customer service as they will resolve the tecnical issues regarding the company products
7.Depriciation comes under manufacturing overhead
8. Rearrangement process cost comes under manufacturing overhead
9.Toll free number for customer orders cost comes under customer service costs
10.Salaries to scientists comes under research and development cost
