projected monthly promt at th PROBLEMS Group B P2558 Classif

projected monthly promt at th PROBLEMS Group B P2-558 Classify costs along the value chain (Learning Objectives 2 & 4) Best Value Cola produces a lemon-lime soda. The productio n process starts with workers mixing the lemon syrup and lime flavouring in a secret recipe. The company enhances the combined syrup with caffeine. Finally, Best Value dilutes the mixture with carbonated wate Best Value Cola incurs the following costs (in thousands):

Solution

1 & 2) Distribution of costs and total costs for each value-chain category :

45

3. The total inventoriable product costs are = DM 20730 + DL 9050 + Manuf O/H 3575 = $33355

4. If the bonuses of managers of R&D and Design functions are based on their unit\'s target cost reductions, then they like to have least cost in their department and try to posepone the expenses to the next period.

All these activities of the managers of R&D and Design functions will affects the other elements of the value chain. The marketing function would not able to offer the new products to the customers. The production department would not able to product any innovative products. The distribution function become customary distributor, nothing new. Thus, expenditure and creativity in the R&D and Design functions is necesssary and required by the other functions.

			Production
	R&D	Designing of products or processes	DM	DL	Manuf O/H	Marketing	Distribution	Consumer services
Plant utilities					750
depre PE					2800
payment for new recipe	1040
salt					25
replace products with expired dates upon customer complaint								45
rearranging plant layout		1400
lemon syrup			17000
lime flavouring			1120
production costs of \"cents-off\" store coupons for customers						470
delivery truck driver\'s wages							285
Bottles			1310
Sales commi							400
plant janitors\' wages				1050
wages of workers who mix syrup				8000
customer hotline						190
dep on delivery trucks							200
freight in			1300
TOTAL	1040	1400	20730	9050	3575	660	885	45