Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: $$\begin{array} { l c c }
{ \text { Name of Company } } & \text { Revenues } & \text { Cost of Purchased Inputs } \
\text { Citrus Growers Inc. } & \$ 0.75 & 0 \
\text { Florida Jam Company } & \$ 2.00 & \$ .75 \
\text { The Corner Store } & \$ 2.50 & \$ 2.00
\end{array}$$ What is the value added of Florida Jam Company?

Question

Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: $$\begin{array} { l c c } 
{ \text { Name of Company } } & \text { Revenues } & \text { Cost of Purchased Inputs } \
\text { Citrus Growers Inc. } & \$ 0.75 & 0 \
\text { Florida Jam Company } & \$ 2.00 & \$ .75 \
\text { The Corner Store } & \$ 2.50 & \$ 2.00
\end{array}$$ What is the value added of Florida Jam Company?

Quizplus · Accepted Answer

Value added is the increase in the value of a product as a result of a particular activity. For Florida Jam Company, the value added is calculated by subtracting the cost of purchased inputs from the revenues which is $2.00 - $0.75 = $1.25. Therefore, the correct answer is (C) $1.25.

Suppose a Jar of Orange Marmalade That Is Ultimately Sold