A jar of orange marmalade,ultimately sold to a customer at The Corner Store,is produced by the following production process:

-What is the value added of Florida Jam Company?
A) $0.00.
B) $0.50.
C) $0.75.
D) $1.25.
E) $2.00.

Question

A jar of orange marmalade,ultimately sold to a customer at The Corner Store,is produced by the following production process:
 
-What is the value added of Florida Jam Company?
A) $0.00. 
B) $0.50. 
C) $0.75. 
D) $1.25. 
E) $2.00.

Quizplus · Accepted Answer

Value added is calculated by taking the final selling price of the product and subtracting the cost of all materials and inputs used in production. In this case, the selling price of the jar of marmalade is $4.50 and the cost of materials (oranges, sugar, jars, labels, labor, etc.) is $3.25. Therefore, the value added by Florida Jam Company is $1.25.

A Jar of Orange Marmalade,ultimately Sold to a Customer at the Corner