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).