Question

Suppose that furniture production encompasses the following stages: Stage 1: Trees are sold to lumber company. $1,000 Stage 2: Lumber is sold to furniture company. $2,500 Stage 3: Furniture company sells furniture to retail store. $6,000 Stage 4: Furniture store sells furniture to consumer. $12,000 Instructions: Enter your responses rounded to the nearest whole number. a. What is the value added at each stage?

Answer 1

Step-by-step explanation:

The computation of the value added at each stage is

Stage Value of transaction Added value

1 $1,000 $1,000

2 $2,500 $1,500 ($2,500 - $1,000)

3 $6,000 $3,500 ($6,000 - $2,500)

4 $12,000 $6,000 ($12,000 - $6,000)