Classifying costs: value chain manufacturer Igloo Icicle Company produces and sells ice-cream. Classify the costs listed below, using these value chain classifications:
(a) Research and development
(b) Design
(c) Supply
(d) Manufacturing
(e) Marketing
(f) Distribution
(g) Customer service
Costs:
1. The cost of cream and sugar used to make the ice-cream.
2. Electricity. The cold room that stores the completed ice-cream accounts for most of the electricity consumed.
3. The cost of fuel for delivery trucks.
4. The wages paid to staff who mix the ingredients to make the ice-cream.
5. The wages paid to the manager’s mother who works part-time in the kitchen developing recipes for new ice-cream flavours, based on ‘family secrets handed down by her mother.
6. The cost of advertising in the food trade magazines.