Value chain classifications Match each of the following cost items with the value chain business function where you would expect the cost to be incurred:

Business Function

Cost Item

Answer

a. Research and development

1. Purchase of raw materials

b. Design

2. Advertising

c. Production

3. Salary of research scientists

d. Marketing

4. Shipping expenses

e. Distribution

5. Reengineering of product assembly process

f. Customer service

6. Replacement parts for warranty repairs

7. Manufacturing supplies

8. Sales commissions

9. Purchase of CAD (computer aided

design) software

10. Salary of Web site designer