BMGT 321 Chapter 1 Homework /

BMGT 321 Chapter 1 Homework /

BMGT 321 Chapter 1 Homework /

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Solutions to In-Class Homework Discussion Exercises and Problems

1-18 (15 min.) Value chain and classification of costs, fast-food restaurant.

Burger King, a hamburger fast food restaurant, incurs the following costs:
a. Cost of oil for the deep fryer
b. Wages of the counter help who give customers the food they order
c. Cost of the costume for the King on the Burger King television commercials
d. Cost of children’s toys given away free with kids’ meals
e. Cost of the posters indicating the special “two cheeseburgers for $2.50”
f. Costs of frozen onion rings and French fries
g. Salaries of the food specialists who create new sandwiches for the restaurant chain
h. Cost of “to-go” bags requested by customers who could not finish their meals in the restaurant

Required: Classify each of the cost items (a–h) as one of the business functions of the value chain shown in Exhibit 1-2 (page 6).

1-25 (10–15 min.) Professional ethics and reporting division performance.

Maria Mendez is division controller and James Dalton is division manager of the Hestor Shoe Company. Mendez has line responsibility to Dalton, but she also has staff responsibility to the company controller.
Dalton is under severe pressure to achieve the budgeted division income for the year. He has asked Mendez to book $200,000 of revenues on December 31. The customers’ orders are firm, but the shoes are still in the production process. They will be shipped on or around January 4. Dalton says to Mendez, “The key event is getting the sales order, not shipping the shoes. You should support me, not obstruct my reach- ing division goals.”

1. Describe Mendez’s ethical responsibilities.
2. What should Mendez do if Dalton gives her a direct order to book the sales?

1-26 (10–15 min.) Professional ethics and reporting division performance....

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