Value added refers to the profit a manufacturer earns on a product once it has subtracted the costs of the inputs it used to make the product.

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Value added refers to the increase in value that a business creates by undergoing a production process, not just the profit. It is the difference between the sales revenue and the cost of materials or inputs used in the production, not just the profit earned.

Value Added Refers to the Profit a Manufacturer Earns on a Product