An Example of "Value-Added" as an Important Concept for International

question 47

Multiple Choice

An example of "value-added" as an important concept for international trade was the case of imports of iPhones from China. The value-added by China was equal to:

• A) the total value of imported raw and semi-finished materials into China plus the value of the export to the United States.
• B) the total value of the export to the United States minus the total value of imported raw and semi-finished materials into China.
• C) the total value of the export plus shipping costs.
• D) the difference between the total values of exports to the United States minus the total value of imports from the United States.

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Definitions:

FIFO

Stands for "First-In, First-Out," an inventory valuation method where goods sold are those that are oldest in the inventory first.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding new purchases to the starting inventory and subtracting goods sold.

Physical Flow

The actual movement of goods from the point of production through to the end-user, encompassing distribution and logistics.

Specific Identification

An inventory costing method where each item of inventory is individually valued and tracked.