Alejandro Scoobertini owns a store specializing in soccer jerseys.In 2016, he purchased $150,000 worth of jerseys from manufacturers, employed one worker for $40,000, purchased $20,000 worth of supplies from an office supply store, and sold jerseys for $280,000.Based on this information, what was the value added at Alejandro's store in 2016?
A)$70,000
B)$110,000
C)$280,000
D)$490,000

Question

Quizplus · Accepted Answer

Value added is the difference between the value of the output of a firm and the value of the inputs used to produce that output. In this case, the value of the output is $280,000 and the value of the inputs is $150,000 + $40,000 + $20,000 = $210,000. Therefore, the value added is $280,000 - $210,000 = $70,000.

Alejandro Scoobertini Owns a Store Specializing in Soccer Jerseys