Question

From the data given below, find out the following: 

(a) value of output at market prices, 

(b) Gross value added at market prices, 

(c) Net value added at market prices, 

(d) Net value added at factor cost.

Heads	Amount
1. Opening stock	200
2. Closing stock	400
3. Purchase of raw material	700
4. Sales	1600
5. Corporation tax	100
6. Undistributed profits	50
7. Dividend	50
8. Rent	150
9. Interest	100
10. Depreciation	200
11. Indirect tax	150
12. Subsidies	50
13. Wages and salaries	350

Answer 1

(a) Value of output at market prices:

(b) Gross value added at market prices = value of output – intermediate consumption 

= 1800 – 700 = 1100 

(c) Net value added at market prices = gross value added at market prices – depreciation 

= 1100 – 200 = 900 

(d) Net value added at factor cost = net value added at market prices – net indirect taxes (indirect taxes - subsidies) 

= 900 – (150-50) = 800