Chapter 1, Problem 1.18E

To determine

Value chain:

A value chain refers to a set of activities a firm performs so as to deliver a product or service to the ultimate user. It is a process through which firms receive raw materials, add value to the raw materials through various processes to make a finished product, and sell the end product to its customers.

The business activities that add value to the experience of the ultimate user includes, research and development, product and process design, production, marketing, distribution, and after-sales service. These business activities are part of administrative services.

To ascertain: The cost of each item as one of the business functions of the value chain.