'Value added' can best be defined as:
A) sales revenue less the cost of all bought-in materials and services and all wages and salaries
B) sales revenue less the cost of all bought-in materials and services
C) sales revenue less the cost of all bought-in materials and services, all wages and salaries and interest expense
D) sales revenue less the cost of all bought-in materials and services, all wages and salaries, interest expense and income tax expense

Question

Quizplus · Accepted Answer

Value added is calculated by deducting the cost of all bought-in materials and services from the sales revenue. This represents the value that the company has added to the product or service through its own internal processes such as manufacturing, design, and marketing. It does not include wages and salaries, interest expense, or income tax expense.

'Value Added' Can Best Be Defined As