Suppose Truck Shack incurred the following costs at its Philadelphia, Pennsylvania, store.

Requirements:

1. Classify each of these costs according to its place in the value chain (R&D, Design, Production, Marketing, Distribution, or Customer Service).
2. Within the production category, break the costs down further into three subcategories: Direct Materials, Direct Labor, and Manufacturing Overhead.
3. Compute the total costs for each value chain category.
4. How much are the total product costs?
5. How much are the total prime costs?
6. How much are the total conversion costs?

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Newspaper advertisements Payment to consultant for advice on location of new store..... Purchases of merchandise............. Freight-in.............. Salespeople's salaries....... $ 5,300 $ 2,400 $31,000 $ 3,600 $ 4,900 Depreciation expense on delivery trucks $ 1,400 Research on whether store should sell satellite radio service......... $ 500 Customer Complaint Department. $ 900 Rearrangement of store layout.... $ 600