Question
A wheat farmer produces 2000 bushels of wheat which he sells to a miller for Sh. 20 a bushel. The farmer receives a payment of
A wheat farmer produces 2000 bushels of wheat which he sells to a miller for Sh. 20 a bushel. The farmer receives a payment of Sh.(a)______________ from the miller. The value added by the farmer is Sh.(b) _____________. The miller grinds the wheat into flour. She makes 1200kgs of flour, which she sells to a baker for Sh.40 per kg. The miller receives the payment of Sh.(c)____________ from the baker. The value added by the miller is Sh.(d)_____________. The baker bakes the flour into 1000 loaves which he sells for Sh. 50 apiece to the food distributor. The baker receives a payment of Sh.(e)_____________ from the distributor. The value added by the baker is Sh.(f)_____________. The distributor sells 200 loaves to a local restaurant for Sh. 100 each. The remainder are sold to grocery stores at Sh. 80 each. The distributor receives payment totaling Sh. (g)______________. The value added by the distributor is Sh.(h)_______________. At the retail level, the restaurant sells 180 loaves at Sh. 150 each. 20 loaves are unsold and must be discarded. The grocery store sells all of their consignment for Sh. 100. The retailers receive payment totaling Sh. (i)____________. The value added by the retailers is Sh.(j) _____________. The total value added by all the participants in the production process is Sh.(k) __________________.(10 marks)
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