Boeing buys $3 million worth of steel, $2.5 million worth of computer hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing sells this particular model at $10 million. The value added by Boeing is equal to:

Question

Quizplus · Accepted Answer

The value added by Boeing is calculated by subtracting the cost of intermediate goods (steel, computer hardware and software, and mechanical tools) from the final selling price. So, $10 million - ($3 million + $2.5 million + $1 million) = $3.5 million.

Boeing Buys $3 Million Worth of Steel, $2