Question

Anissa makes custom bird houses in her garage and she buys all her supplies from a local lumber yard. Last year she purchased ​$4500 worth of supplies and produced 2500 bird houses. She sold all 2500 bird houses to a local craft store for ​$15 each. The craft store sold all the bird houses to customers for ​$45 each. For the total bird house​ production, calculate the value added of Anissa and of the craft store.

Answer 1

Value added of Anissa = Value of output - Intermediate consumption = (2,500 x $15) - $4,500 = $37,500 - $4,500 = $33,000 Value added of craft store = Value of output - Intermediate consumption = (2,500 x $45) - (2,500 x $15) = $112,500 - $37,500 = $75,000