Question

. A business buys $5,000 worth of inputs from other firms in order to produce a product. The business makes 100 units of the product and each of them sells for $65. The value added by the business to these products is: A. $5,000B. $6,500C. $1,500D. $1,000

Answer 1

Answer:

The correct answer to the following question is option C) $1500 .

Explanation:

Given information -

Input bought by business worth = $5000

The revenue that business gets from selling the product to consumers =

100 units x $65 = $6500

This means that after buying the input business added $1500 ( $6500 - $5000 ) worth of added value in to the product. This value added can be described as an additional feature that a business adds in to product that makes a product more attractive to consumers .

Answer 2

Answer:

The correct option is c. $1,500

Explanation:

In this question, we use the formula of value added which is shown below:

Value added = Sales value - costing price or buying price

where,

Sales value = Sales units × sales price

                   = 100 × $65

                   = $6,500

And, the buying price is $5,000

So, the valued added would be equal to

= $6,500 - $5,000

= $1,500

Thus, The value added by the business to these product is $1,500

Hence, the correct option is c. $1,500