Horngren's Cost Accounting, Student Value Edition (16th Edition)
Horngren's Cost Accounting, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134476032
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 1, Problem 1.19E

Value chain and classification of costs, fast-food restaurant. Burger King, a hamburger fast-food restaurant, incurs the following costs:

  1. a. Cost of oil for the deep fryer
  2. b. Wages of the counter help who give customers the food they order
  3. c. Cost of the costume for the King on the Burger King television commercials
  4. d. Cost of children’s toys given away free with kids’ meals
  5. e. Cost of the posters indicating the special “two cheeseburgers for $2.50”
  6. f. Costs of frozen onion rings and French fries
  7. g. Salaries of the food specialists who create new sandwiches for the restaurant chain
  8. h. Cost of “to-go” bags requested by customers who could not finish their meals in the restaurant

Classify each of the cost items (a–h) as one of the business functions of the value chain shown in Figure 1-2 (page 5).

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Luna Café bears the following costs: The cost of oil for a deep fryer Wages of the workers of the responsible center for submitting customers' requests The cost of TV advertising costumes for The Café. The cost of the children's games which are given free of charge with the children's meals The cost of the posters for the advertisement for the new offer "Three fish burgers at 6.30 dinars" Costs of frozen onions and French fries The salaries of food professionals who make new sandwiches for the restaurant chain The cost of wrapping meals that customers requested and were unable to finish their meals in the restaurant   Required: Match each cost element (1-8) as a business function in the value chain which is as follows: distribution Production customers service Marketing research and development Product and process design
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Horngren's Cost Accounting, Student Value Edition (16th Edition)

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