A farmer sells $1000 worth of apples and $200 worth of flour to a supermarket. A baker purchases those apples for $1200 and the flour for $300. The baker uses these ingredients to sell $2000 worth of apple pies. The value added by the baker isGroup of answer choices200$300$1000$500
Question
A farmer sells 200 worth of flour to a supermarket. A baker purchases those apples for 300. The baker uses these ingredients to sell 300500
Solution
The value added by the baker can be calculated by subtracting the cost of the raw materials (apples and flour) from the final selling price of the apple pies.
The baker bought the apples for 300. So, the total cost of the raw materials for the baker is 300 (for flour) = $1500.
The baker then sells the apple pies for $2000.
So, the value added by the baker is 1500 (cost of the raw materials) = $500.
Therefore, the value added by the baker is $500.
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