Table 19-5
Consider the table above showing three stages of production of an automobile.
-Refer to Scenario 19-1. The value added of CANOES-R-US for each canoe equals
A) $1,200.
B) $800.
C) $500.
D) $400.

Question

Table 19-5
  Consider the table above showing three stages of production of an automobile.
-Refer to Scenario 19-1. The value added of CANOES-R-US for each canoe equals
A) $1,200. 
B) $800. 
C) $500. 
D) $400.

Quizplus · Accepted Answer

The value added is calculated as the difference between the sales price and the cost of intermediate goods. If CANOES-R-US sells a canoe for $1,200 and the cost of intermediate goods is $700, the value added is $1,200 - $700 = $500.

Table 19-5 Consider the Table Above Showing Three Stages of Stages