Suppose the smartphone manufacturer Peach Electronics provides the folowing info

Question

Suppose the smartphone manufacturer Peach Electronics provides the folowing information for is costs last month (in miliong) EE (Click the icon to view the costs.) Read the requirements. Requirements 1, 2 and 3. Classifty each of these costs according to its place in the value chain. Within the production category, break the costs down further into thr subcategories: Direct Materials, Direct Labor, and Manufacturing Overhead. Then calculate the total cost for each value chain category. (Enter amounts in milions. If box is not used in the table, leave the box empty; do not enter a zero.) Data Table Customer Delivery expense to customers via UPS S8ad Marketing Distribution Service Salaries of salespeople Chipset (the set of chips used on a phone's motherboard) Exterlor case for phone Assembly-ine workers' wages Technical customer support hotline Depreolation on plant and equipment Rearrangement of production process to a 1-800 (toll free) ine for customer orders Salaries of scientists who developed new model $ 56 $10 s 75 the next question.

Explanation / Answer

Peach Electronics Value Chain Cost Classification Cost R and D Design Production Marketing Distribution Customer Service Direct Materials Direct Labor Manufacturing Overhead Delivery Expense 8 Salaries of Sales People 7 Chipset 56 Exterior Case for phone 5 Assembly line workers' wages 10 Technical customer support hotline 4 Depreciation on plant and equipment 75 Rearrangement of production process to accommodate new robot 2 1-800 toll free line for customer orders 4 Salaries of scientists who developed new model 9 Total Costs 2 9 61 10 75 11 8 4 Requirement 4 Direct Material + Direct Labor + Manufacturing Overhead = Total Product Cost 61 + 10 + 75 = 146 Requirement 5 Direct Material + Direct Labor = Total Prime Cost 61 + 10 = 71 Requirement 6 Direct Labor + Manufacturing Overhead = Total Conversion Cost 10 + 75 = 85

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