Question

Suppose wheat costs Rs.
10 per kg., wheat-flour costs Rs. 12 per kg. and price of bread is Rs. 8 per 500
grams. Find value added at different stages of bread production.

Answer 1

Value added at different stages is given below:-

• Initial cost of wheat = ₹10/kg
• Wheat flour cost = ₹12/kg
• Cost of bread = ₹8 per 500gm

∴ Cost of bread per kg = ₹8 ×2

                                      = ₹16

1. Therefore, value added at wheat flour stage = cost of 2nd stage - Initial cost

      = 12 - 10

  Value added at the second stage  = ₹2

So, similarly,

Value added at the third or bread stage = cost of 3rd stage - the cost of the second stage

   = 16 - 12

Value added at the third or bread stage = ₹4

Hence, the total value added = ₹4 + ₹2

                                                 = ₹6

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