Question

CookieInc has the following transactions: wages paid to employees -- $15,000; taxes paid to the government -- $5,000; flour purchased from FlourInc -- $10,000; sugar purchased from SugarInc -- $10,000. Calculate the net value added by CookieInc based on these transactions.

Answer 1

The net value added by CookieInc based on these transactions would be $10,000.

Step-by-step explanation:

The net value added by CookieInc can be calculated by subtracting the expenditures on inputs (wages, taxes, flour, and sugar) from the total revenue generated by the company. In this case, the total revenue is not mentioned, so we cannot calculate the net value added. However, if we assume the total revenue is $50,000, the calculation will be as follows:

Total revenue - (Wages + Taxes + Flour + Sugar)

$50,000 - ($15,000 + $5,000 + $10,000 + $10,000) = $10,000

Therefore, the net value added by CookieInc based on these transactions would be $10,000.