Ask Question
6 October, 00:25

An artist buys scrap metal from a local steel mill as a raw material for her sculptures. Last year, she purchased $5 comma 000 worth of scrap metal. With the steel she produced 10 authentic sculptures that she sold for $800 each to a local art dealer. The art dealer then sold all of the sculptures to art collectors for an average of $1 comma 000 each. What was the total value added of the artist, and what was the total value added of the local art store?

+1
Answers (1)
  1. 6 October, 01:56
    0
    1. $1000 (sale price) - $800 (Dealer price) = $200

    2. $200 * 10 sculptures = $2000 of total value added

    Explanation:

    STEPS

    1) The artist pays $5,000 for the intermediate goods (scrap metal) and sells the finished goods (10 sculptures) for $1 comma 1,000 each.

    The value added for the artist equals $3000

    2) The art dealer pays $800 for the intermediate goods (sculptures) and sells the finished goods (sculptures) for $1000 each. Calculate the difference between the price the dealer paid for the sculptures and the amount for which the dealer sold the sculptures.

    3) $1000 (sale price) - $800 (Dealer price) = $200

    4) $200 * 10 sculptures = $2000 of total value added
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “An artist buys scrap metal from a local steel mill as a raw material for her sculptures. Last year, she purchased $5 comma 000 worth of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers