This is a very important idea .All businesses attempt to add value. . If value is not
added to the materials and components that a business buys in, then:
other costs cannot be paid for.
no profit will be made.
Example:
The selling price of a newly built house is $100 000.
The value of the bought-in bricks, cement, wood and other materials was $15000.
The added value of the building firm was $85 000. This is not all profit – out of
this the builder must pay wages and other costs too.