Question

Miner extracts iron from the earth. A steel mill converts the iron to steel beams for use in construction. A construction company uses the steel beams to make a building. Assume that the total product of these firms represents the only components of the building and that they will have no other uses. Complete the following table:

can you please provide detail work?

Company	Product	Total Sales	Value Added
Acme Mining	iron ore	$100,000	?
Fuller Mill	steel beams	$175,000	?
Crane Construction	building	$1,100,000	?
Total Value Added			?

Answer 1

Value added is the difference between the total value of output produced by a firm and the value of inputs used.

Acme Mining Company extracts iron ore from earth and does not incur any cost on inputs.

Total sales of Acme Mining = $100,000

Total cost of input used = $0

Calculate the value added of Acme Mining -

Value added = Total sales of Acme Mining - Total cost of input used = $100,000 - $0 = $100,000

The value added of Acme Mining is $100,000.

Fuller Mill purchases iron ore from Acme Mining for $100,000 and uses it to make steel beams.

Total sales of Fuller Mill = $175,000

Total cost of input used = $100,000

Calculate the value added of Fuller Mill -

Value added = Total sales of Fuller Mill - Total cost of input used = $175,000 - $100,000 = $75,000

The value added of Fuller Mill is $75,000.

Crane Construction purchases steel beams from Fuller Mill for $175,000 to construct building.

Total sales of Crane Construction = $1,100,000

Total cost of input used = $175,000

Calculate the value added of Crane Construction -

Value added = Total sales of Crane Construction - Total cost of input used = $1,100,000 - $175,000 = $925,000

The value added of Crane Construction is $925,000.

Calculate the Total value added -

Total value added = Value added of Acme Mining + Value added of Fuller Mill + Value added of Crane Construction

Total value added = $100,000 + $75,000 + $925,000

Total value added = $1,100,000

The Total Value added is $1,100,000.