Calculate the value of final goods

indian-economy
cbse

#1

Calculate the value of final goods (which will become part of the GDP) in the case given below.
A cotton farmer sells his weekly output of cotton to a weaver for Rs 5,000. The weaver weaves cloth out of this and sells it to the cloth trader for Rs 6,500. The trader sells part of this cloth to a shirt maker for Rs 5,000 and the remaining cloth to a retailer for Rs 3,000. The shirt maker makes 60 shirts, each selling for Rs150. The cloth retailer sells his cloth to the final customers for Rs 4,000.


#2

Value added by the farmer = Rs 5,000
Value added by the weaver
= Rs 6,500 -Rs 5,000 = Rs 1,500
Value added by the trader
= Rs 5,000+ Rs 3,000- Rs 6,500 = Rs 1,500
Value added by the retailer
= Rs 4,000 - Rs 3,000 = Rs 1,000
Value added by the shirt maker
= 60 x 150-Rs 5,000 = Rs 4,000
Total value of final goods = value added by all
=Rs (5,000 +1,500 +1,500 + 1,000 + 4,000) = Rs 13,000
This is the same value as the final goods, i.e. Rs 4,000 for the cloth and Rs 9,000 for the shirts.