Suppose firm A sold timber produced in its forest to firm B for ₹ 1,000 and firewood to consumers for fuel for ₹ 500
Suppose firm A sold timber produced in its forest to firm B for ₹ 1,000 and firewood to consumers for fuel for ₹ 500. Firm B converted logs into slippers and partly sold to furniture making firm C for ₹ 800 and the remaining to private consumers for ₹ 700. Firm C sold furniture worth ₹ 1,000 to private consumers and the remaining to a government office for ₹ 500. Calculate:
(i) Value added by firm A, firm B and firm C.
(ii) Total value of output
Ans: (i) Value added by firm A = ₹ 1,500; Value added by firm B = ₹ 500; Value added by firm C = ₹ 700, (ii) Total value of output = ₹ 4,500.
Anurag Pathak Changed status to publish December 21, 2023
Solution:-
(i) Value Added by Firm A = Sold to Firm B + Sold to Consumers for fuel
Value Added by Firm A = ₹ 1,000 + ₹ 500
Value Added by Firm A = ₹ 1,500
(ii) Value Added by Firm B = Sold to Firm C + Sold to Private Consumers – Purchase from Firm A
Value Added by Firm B = ₹ 800 + ₹ 700 – ₹ 1,000
Value Added by Firm B = ₹ 500
(iii) Value Added by Firm C = Sold to Private Consumers + Sold to government office – Purchase from firm B
Value Added by Firm C = ₹ 1,000 + ₹ 500 – ₹ 800
Value Added by Firm C = ₹ 700
(iv) Value of Output = Sales of Firm A + Sales of Firm B + Sales of Firm C
Value of Output = (₹ 1,000 + ₹ 500) + (₹ 800 + ₹ 700) + (₹ 1,000 + ₹ 500)
Value of Output = ₹ 4,500
Anurag Pathak Changed status to publish November 10, 2023
