2-30. COST DRIVERS AND VALUE CHAIN. American Technology Company (ATC) is developing a new camera/security home...
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2-30. COST DRIVERS AND VALUE CHAIN. American Technology Company (ATC) is developing a new camera/security home system to compete with other security systems in the industry. The company will sell the cameras to wholesalers that will, in turn, sell them in retail stores to the final customer. ATC has undertaken the following activities in its value chain to bring its product to market: 1. A. Perform market research on competing brands 2. B. Design a prototype of the phone app and the security camera 3. C. Test the compatibility of the phone app and the security camera 4. D. Make necessary design changes to the prototype based on testing performed in C above. 5. E. Manufacture the security cameras 6. F. Attend trade shows to make wholesalers aware of the camera 7. G. Process orders from the trade show orders and wholesalers 8. H. Deliver the security cameras to the wholesalers 9. I. Provide online assistance to the security camera users 10. J. Make additional design changes to the security camera based on customer feedback . During the process of product development, production, marketing, distribution, and customer service, ATC has kept track of the following cost drivers: Number of security cameras shipped by ATC Number of design changes Number of deliveries made to wholesalers Engineering hours spent on initial product design Hours spent researching competing market brands Customer-service hours Number of security camera orders processed Machine-hours required to run the production equipment Number of product tests conducted FTEs spent on attending trade shows Required 1. 1. Identify each value-chain activity listed at the beginning of the exercise with one of the following value-chain categories: 1. a. Design of products and processes 2. b. Production 3. c. Marketing 4. d. Distribution 5. e. Customer service 2. 2. Use the list of preceding cost drivers to find one or more reasonable cost drivers for each of the activities in ATC's value chain. 2-30. COST DRIVERS AND VALUE CHAIN. American Technology Company (ATC) is developing a new camera/security home system to compete with other security systems in the industry. The company will sell the cameras to wholesalers that will, in turn, sell them in retail stores to the final customer. ATC has undertaken the following activities in its value chain to bring its product to market: 1. A. Perform market research on competing brands 2. B. Design a prototype of the phone app and the security camera 3. C. Test the compatibility of the phone app and the security camera 4. D. Make necessary design changes to the prototype based on testing performed in C above. 5. E. Manufacture the security cameras 6. F. Attend trade shows to make wholesalers aware of the camera 7. G. Process orders from the trade show orders and wholesalers 8. H. Deliver the security cameras to the wholesalers 9. I. Provide online assistance to the security camera users 10. J. Make additional design changes to the security camera based on customer feedback . During the process of product development, production, marketing, distribution, and customer service, ATC has kept track of the following cost drivers: Number of security cameras shipped by ATC Number of design changes Number of deliveries made to wholesalers Engineering hours spent on initial product design Hours spent researching competing market brands Customer-service hours Number of security camera orders processed Machine-hours required to run the production equipment Number of product tests conducted FTEs spent on attending trade shows Required 1. 1. Identify each value-chain activity listed at the beginning of the exercise with one of the following value-chain categories: 1. a. Design of products and processes 2. b. Production 3. c. Marketing 4. d. Distribution 5. e. Customer service 2. 2. Use the list of preceding cost drivers to find one or more reasonable cost drivers for each of the activities in ATC's value chain.
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Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
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