Ask Question
BusinessBusiness
12 December, 23:43

A farmer buys seed for 20 cents that is used to grow wheat. The farmer sells the wheat to the miller for 35 cents, and the miller makes flour, which is then sold to the baker for 55 cents. The baker makes bread and sells it to the grocer for 80 cents, and the grocer sells the bread to a family for $1. What is the value added of the baker and what is the sum of the value added at each stage of production

+4
Answers (2)
  1. 13 December, 02:51
    0
    The Value added of the Baker is $0.25

    The sum of the value added at each stage of production is:

    Farmer = $0.15

    Miller = $0.20

    Baker = $0.25

    Grocer = $0.20

    Total Value added = $0.80

    Explanation:

    Farmer cost = $0.20

    Farmer Margin = $0.15

    Farmer Sells to Miller = $0.35

    Miller Margin = $0.20

    Miller sells to Baker = $0.55

    Baker Margin = $0.25

    Baker sells to Grocer = $0.80

    Grocer Margin = $0.20

    Grocer sells to Family = $1.0

    The concept of Value added states that a product receives extra features from the beginning of its production cycle to when it gets into the hands of its final consumers. The process of it being handed down through the Value Chain results in changes in Prices between the Input Costs and selling Prices. This difference is identified as Value added.

    In this question, the Farmer added Value by turning a seed of wheat to a harvest of wheat which he sold to the Miller. The Miller further added Value by transforming the wheat into flour and selling this to the Baker. The Baker adds value by producing a product the consumer needs and selling to the Grocer, in his case bread. The Grocer added value by making it available on the shelf and within the neighborhood of the consumer.

    This is how value is added. And it varies per product and per channel of distribution too.
  2. 13 December, 03:40
    0
    What is the value added of the baker and what is the sum of the value added at each stage of production?

    the value added by the baker is $0.25 the total value added is $1

    Explanation:

    seed producer adds = selling price = $0.20

    farmer adds = selling price - cost of seeds = $0.35 - $0.20 = $0.15

    miller adds = selling price - cost of wheat = $0.55 - $0.35 = $0.20

    baker adds = selling price - cost of flour = $0.80 - $0.55 = $0.25

    grocer adds = selling price - cost of bread = $1 - $0.80 = $0.20

    total value added = $0.20 + $0.15 + $0.20 + $0.25 + $0.20 = $1

    The value added method simply adds the contribution of every sector in the economy to the GDP. The total value added will always equal the final price of the goods and services sold.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A farmer buys seed for 20 cents that is used to grow wheat. The farmer sells the wheat to the miller for 35 cents, and the miller makes ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
On a mountain trek, you discover a 6-ounce gold nugget. a friend offers to pay $2,500 for it. how do you check whether this is a fair price?
Answers (1)
Adjustments for prepaid expenses: Select one: a. decrease assets and increase revenues. b. decrease expenses and increase assets. c. decrease assets and increase expenses. d. decrease revenues and increase assets.
Answers (1)
On March 14, Teal Co. accepted a 120dau, 6% note in the amount of $10,000 from AZC Co., a customer. On the due date of the note, AZC honors the note and pays in full.
Answers (1)
A fee interest timeshare divides the ownership of a unit into separate time intervals. A. True. B. False.
Answers (1)
GDP per person tells us the income and expenditure of the a. richest person in the economy. b. poorest person in the economy. c. average person in the economy. d. entire economy.
Answers (1)
New Questions in Business
The individual with the highest valuation of the good will win in which of the following auctions? A. Sealed Bid Auction B. English Auction C. Dutch Auction D. All of the above.
Answers (1)
Explain how banks can create money.
Answers (1)
A city acquires a 10-foot strip of a property owner's land for a public walking trail. the owner's home is not affected and she is able to use the land. is the homeowner eligible for compensation?
Answers (1)
A company uses the newsvendor model to manage its inventories and faces normally distributed demand with a coefficient of variation of 0.75. The company decides to order a quantity that exactly equals the mean of its demand forecast.
Answers (1)
Which of the following types of advertisements is particularly expensive 1: Internet Ads 2: Newspaper Ads 3: TV infomercials 4: Radio ads
Answers (2)
Home » Business » A farmer buys seed for 20 cents that is used to grow wheat. The farmer sells the wheat to the miller for 35 cents, and the miller makes flour, which is then sold to the baker for 55 cents.
Sign Up Forgot Password?