Question

A computer manufacturer sells laptops to retail stores for $450 each. If the manufacturer pays $200 for all of the components in each laptop and $75 in wages to it's workers, the value added to each computer by manufacturing is is $250 or $175?

Answer 1

Answer:

The answer is $75

Explanation:

The formula to reach out value addition is

Value Addition=Sales Value-Cost of manufacture or input added

In our Case

Sales Price=$450

Cost of Manufacture or Input=200+75=$275

So by entering above numbers in Value Addition formula we get

Value Addition=$450-$275

Value Addition=$175