Value chain and classification of costs, computer company. Compaq Computer incurs the following costs:

a. Electricity costs for the plant assembling the Presario computer line of products

b. Transportation costs for shipping the Presario line of products to a retail chain

c. Payment to Eileen Donan Designs for design of the Armada Notebook

d. Salary of a computer scientist working on the next generation of minicomputers

e. Cost of a visit by Compaq employees to a major customer to demonstrate Compaq’s multimedia capabilities

f. Purchase of competitors’ products for testing against potential future Compaq products g. Payment to a television station for running Compaq advertisements h. Cost of cables purchased from an outside supplier to be used with the Compaq scanner REQUIRED Classify each cost item in parts

(a) to (h) as belonging to a component of the value chain shown in Exhibit 1-2 (p. 6).

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