BGF Corporation buys $100 000 of sand,rock,and cement to produce ready-to-mix concrete.It sells 10 000 cubic meters of concrete at $30 per cubic meter.The value added by BGF Corporation is:

Question

Quizplus · Accepted Answer

The value added by a company is the difference between the price of its final product and the cost of the inputs used to produce it. In this case, BGF Corporation buys $100 000 worth of materials to produce 10 000 cubic meters of concrete, which it sells for $30 per cubic meter, resulting in total sales of $300 000 ($30 x 10 000).

The value added by BGF Corporation is the difference between the $300 000 in sales and the $100 000 cost of inputs, which is $200 000. Therefore, the correct answer is C) $200 000.

BGF Corporation Buys $100 000 of Sand,rock,and Cement to Produce