The accompanying table provides the revenue and cost of purchased inputs from other firms used to make a 16 ounce carton of almond milk at each stage of production. The Almond Farmer Co-operative is the grower and harvester of raw almonds, which it sells to Almond Milk R Us, who turns raw almonds into almond milk. Almond Milk R Us then sells its almond milk to Super Supermarkets, who then sells almond milk to the general public. Use the information in the table below to calculate the value added at each stage of production and the final market price of almond milk, which is paid by the consumer.
Company Revenue Cost of Purchased Inputs (From other companies)
Almond Farmer Co-operative (Sellers of Raw Almonds) $1.61 $0.00
Almond Milk R Us(Maker of Almond Milk) $2.72 $1.61
Super Supermarkets $3.83 $2.72
Answer the following questions. Round your answers to the nearest cent.
a. What is the value added by the Almond Farmer Co-operative?
$
b. What is the value added by Almond Milk R Us, the makers of almond milk?
$
c. What is the value added by Super Supermarkets?
$
d. What is the final market value of the almond milk?
To calculate the value added at each stage of production and the final market price of almond milk, you need to subtract the cost of purchased inputs from the revenue for each company.
a. Value added by the Almond Farmer Co-operative:
Revenue - Cost of Purchased Inputs = $1.61 - $0.00 = $1.61
b. Value added by Almond Milk R Us:
Revenue - Cost of Purchased Inputs = $2.72 - $1.61 = $1.11
c. Value added by Super Supermarkets:
Revenue - Cost of Purchased Inputs = $3.83 - $2.72 = $1.11
d. Final market value of almond milk:
The final market value is the revenue of Super Supermarkets, which is $3.83.