Business Activity

Question 1

What is added value?

Answer 1

Added value is the difference between the sales value of a product and the cost of all the resources used to produce the product. It is not the same as profit.

Question 2

How can a business add value to a product?

Answer 2

For every production process raw materials go through, it is said to gain added value. This is because the work carried out increases the value of the raw materials used.

Question 3

What is an example of how a business can add value to a product?

Answer 3

A product like milk may go through many processes before it is sold to customers. For example, the milk will have to be processed, in this processing chemicals may be added to the milk. When the milk is packaged this also can add value to the milk.