#addedvalue #businessstudies

This is a very important idea .All businesses attempt to add value. . If value is not

added to the materials and components that a business buys in, then:

• other costs cannot be paid for.

• no profit will be made.

Example:

• The selling price of a newly built house is $100 000.

• The value of the bought-in bricks, cement, wood and other materials was $15000.

• The added value of the building firm was $85 000. This is not all profit – out of

  this the builder must pay wages and other costs too.