CMA Final · Entrepreneurship and Startup · Value Addition
Anaya Foods buys tomatoes at ₹20 per kg and converts each kg into 0.5 kg of sauce, with processing and packing cost of ₹15 per kg of tomatoes used. Sauce sells at ₹90 per kg. What is the value added per kg of tomatoes processed, measured as selling revenue less the cost of the bought-in tomatoes?
Value added is ₹25 per kg of tomatoes. One kg of tomatoes yields 0.5 kg of sauce, giving revenue of ₹45 at ₹90 per kg. Subtracting the ₹20 cost of the bought-in tomatoes leaves ₹25 of value added.
- A₹25Correct
- B₹10
- C₹45
- D₹70
Explanation
Revenue per kg of tomatoes = 0.5 × ₹90 = ₹45. Value added = 45 − bought-in input 20 = ₹25. The figure ₹10 wrongly also deducts the processing cost of ₹15, which is a cost of creating the value and not a bought-in input under this definition. ₹70 uses the full ₹90 price ignoring the yield.
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