50 Important Numerical of Value Added Method (National Income) with solutions class 12 CBSE Board

Hey, Welcome to Commerce School. Here we are going to solve 50 important Numerical of value added method of National Income with solutions. these numerical are very very important with point of view of the CBSE Board Examination.

Formula of Value Added Method of National Income

Other Formulas of Sales

1. Sales = Sales to households + Sales to other firms + Exports
2. Sales = Sales to households + Production for self consumption + Sales to other firms + Exports

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Must do Numerical of Value Added Method of National Income with solutions (explanations).

1. On the basis of the following data about an economy which consists of only two firms, find out:

a) Value Added by firm A and B, and

b) Gross Value Added or Gross Domestic Product at Factor Cost.

Items

Items	₹ in lakhs
i) Sales by firm A	100
ii) Purchases from firm B by Firm A	40
iii) Purchases from firm A by Firm B	60
iv) Sales by firm B	200
v) Closing Stock of Firm A	20
vi) Closing Stock of Firm B	35
vii) Opening Stock of Firm A	25
viii) Opening Stock of Firm B	45
xi) Indirect taxes paid by both firms	30

Answer:-

a)

Value of output of firm A = Sales of Firm A + Change in Stock (Closing Stock – Opening Stock)

Value of output of Firm A = i) + (v – vii)

Value of Output of Firm A = ₹100 + (₹20 – ₹25) = ₹ 95

Value Added by Firm A = Value of output of firm A – Intermediate Consumption of Firm A (Purchases of Firm A from other Firm)

Value Added by Firm A = ₹95 – ₹40 = ₹55 lakh

Value of output of Firm B = Sales of Firm B + Change in Stock (Closing Stock – Opening Stock)

Value of Output of Firm B = iv) + (vi – viii)

Value of Output of Firm B = ₹200 + (₹35 – ₹45) = ₹190

Value Added by Firm B = Value of output of Firm B + Intermediate Consumption of Firm B (Purchases of Firm B from other Firm)

Value Added by Firm B = ₹190 – ₹60 = ₹ 130 lakh

Read this lecture:- What is Intermediate Consumption ultimate Concept Clarity

b)

Gross Domestic Product at Factor Cost (Gross Value Added at FC) = Value Added by Firm A + Value Added by Firm B – Indirect taxes paid by both firms

Gross Domestic Product at FC = ₹55 lakh + ₹130 lakh – ₹30 lakh = ₹155 lakh

Note- 1) Purchase of a firm from another firm is considered as intermediate consumption. 2) Value added by firms A and B implies gross value added at market price.

2. Calculate:–

a) Gross Value Added at Market Price, and

b) National Income from the following data.

Items	₹ in lakh
(i) Value of Output: a) Primary Sector b) Secondary Sector c) Tertiary Sector	800 200 300
(ii) Value of Intermediate inputs purchased by: d) Primary Sector e) Secondary Sector f) Tertiary Sector	400 100 50
(iii) Indirect taxes paid by all sectors	50
(iv) Consumption of fixed capital of all sectors	80
(v) Factor income received by the residents from rest of the world	10
(vi) Factor income paid to non-residents	20
(vii) Subsidies received by all sectors	20

Solution:-

a)

Gross Value added at Market Price = Value of Output of all sector – Intermediate consumption of all sector

GVA at MP = a) + b) + c) – (d + e + f)

GVA at MP = ₹800 +₹200 +₹300 – (₹400 + ₹100 + ₹50) = ₹750 lakh

b)

National Income = GVA at MP – Consumption of Fixed Capital – Net Indirect Tax (Indirect Tax – Subsidy) + NFIA (Factor income from abroad – Factor income to abroad)

National Income = ₹750 lakh – ₹80 lakh – (₹50 – ₹20) + (₹10 – ₹20)

National Income = ₹630 lakh

Note:- There are 8 aggregates of National Income. In order to derive different figures, consumption of fixed capital, net indirect tax, and NFIA is adjusted

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3. Find Gross Value Added at Market Price:-

Items	(₹ in lakh)
i) Depreciation	20
ii) Domestic Sales	200
iii) Net Change in Stocks	(-) 10
iv) Exports	10
v) Single use producer goods	120

Solutions:-

Sales = Domestic Sales + Exports

Sales – ii) + iv) = ₹200 + ₹10 = ₹210

Change in stock = Net Change in Stocks = (-) 10

Intermediate Consumption = ₹ 120

Gross Value Added at MP = Sales + Change in stock – Intermediate Consumption

GVA at MP = ₹210 + ( – ₹10) – ₹120 = ₹80

Note: Single use producer goods are intermediate consumption

CBSE Delhi – 2016

4. Find Net Value Added at Market Price:

Items	(₹ in lakh)
i) Fixed capital good with a life span of 5 years	15
ii) Raw Materials	6
iii) Sales	25
iv) Net Change in Stock	(-) 2
v) Taxes on production	1

Solution:-

Value of Output = Sales + Change in Stock

Value of Output = iii) + iv) = 25 + ( – 2) = 23

Gross Value Added at MP = Value of Output – Intermediate Consumption

GVA at MP = ₹ 23 – ₹ 6 = ₹ 17

Net Value Added at MP = GVA at MP – Consumption of fixed Capital

Consumption of Fixed Capital = Total value of fixed Capital/life span = 15/5 = ₹ 3 lakh

NVA at MP = ₹ 17 – ₹ 3 = ₹ 14

[CBSE Delhi – 2016]

Further Resources:-

Read Here:- 50+ Numerical of Income Method of National Income (Must Do)

Read Here:- 50+ Numerical of Expenditure Method of National Income (Must Do)

5. Find Net Value Added at Factor Cost:-

Items	(₹ in lakh)
i) Durable use producer goods with a life span of 10 years	10
ii) Single use producer goods	5
iii) Sales	20
iv) Unsold output produced during the year	2
v) Taxes on production	1

Solution:-

Value of Output = Sales + Change in Stock

Value of Output = iii) + iv) = ₹ 20 + ₹ 2 = ₹ 22

GVA at MP = Value of Output – Intermediate Consumption

Intermediate Consumption = Single use producer goods = ₹ 5

GVA at MP = ₹ 22 – ₹ 5 = ₹ 17

Consumption of fixed capital = Total value of durable use goods/Total life span = ₹10/₹10 = ₹ 1 lakh

Net Indirect tax = Taxes on production – subsidy of production = ₹ 1 – ₹ 0 = ₹ 1

Net Value added at FC = GVA at MP – consumption of fixed capital – Net Indirect tax (Indirect Tax – Subsidy)

NVA at FC = ₹ 17 – ₹ 1 – ₹ 1 = ₹ 15

[CBSE Delhi – 2016]

6. Calculate the Net Value Added at Factor Cost:

S.N	Items	(₹ in lakh)
i)	Goods and Service tax	25
ii)	Consumption of fixed Capital	5
iii)	Closing Stock	10
iv)	Corporate tax	15
v)	Opening stock	20
vi)	Sales	540
vii)	Purchase of raw materials	140

Solution:-

Value of Output = Sales + Change in stock

Value of Output = vi + ( iii + v) = ₹ 540 + ( ₹ 10 – ₹ 20 ) = ₹ 530

Gross Value added at Market Price (GVA at MP) = Value of Output – Intermediate Consumption

GVA at MP = ₹ 530 – ₹ 140 = ₹ 390

Net value added at factor cost (NVA at FC) = GVA at MP – Depreciation – Net Indirect tax (Indirect tax – subsidy)

NVA at FC = ₹ 390 – 5 – (25 – 0) = ₹ 360 lakh

Note:-

1) Goods and Service tax is the indirect tax

2) Corporate tax paid by the company to government and considered as a direct tax and thus is not considered here.

3) Purchase of raw materials is a intermediate consumption.

7. Calculate the Gross Value Added at Market Price

S.N	Items	(₹ in lakh)
i)	Goods and service tax	40
ii)	Consumption of fixed capital	15
iii)	Closing stock	20
iv)	Sales	700
v)	Subsidy	5
vi)	Intermediate consumption	400
vii)	Opening Stock	10

Solution

Value of Output = Sales + Change in Stock

Value of Output = iv + ( iii – vii) = 700 + ( 20 – 10 ) = ₹ 710

Gross Value Added at Market Price (GVA at MP) = Value of Output – Intermediate Consumption

GVA at MP = ₹ 710 – ₹ 400 = ₹ 310 lakh

8. Calculate gross value added at market price.

S.N	Items	(₹ lakh)
i)	Goods and service tax	30
ii)	Sales	800
iii)	Depreciation	50
iv)	Net Change in stocks	– 40
v)	Purchase of raw materials	360
vi)	Corporate tax	10

Solution:-

Value of Output = Sales + Net change in stocks

Value of Output = ii + iv = 800 + (- 40) = ₹ 760

Gross Value added at MP (GVA at MP) = Value of Output – Intermediate Consumption

GVA at MP = 760 – ₹360 = ₹ 400 Lakh

9. From the following data, calculate value added by firm X and by firm Y:-

S.N	Items	(₹ lakh)
i)	Closing stock of firm X	20
ii)	Closing stock of firm Y	15
iii)	Opening stock of firm Y	10
iv)	Opening stock of firm X	5
v)	Sales by firm X	300
vi)	Purchases by firm X from firm Y	100
vii)	Purchases by firm Y from firm X	80
viii)	Sales by firm Y	250
ix)	Import of raw material by firm X	50
x)	Exports by firm Y	30

Solution:-

Calculation of Value Added by firm X

Value of Output by Firm X = Sales by Firm X + Change in Stock of Firm X

Value of Output by Firm X = v – (i – iv) = 300 + (20 – 5) = ₹ 315

Value added by Firm X (GVA at MP by Firm X) = Value of Output – Intermediate Consumption (Purchases by firm X from firm Y + Import of raw material by firm X)

Value added by Firm X = 315 – (100 + 50) = ₹ 165 lakh

Calculation of Value Added by firm Y

Value of Output by Firm Y = Sales by Firm Y + Change in Stocks of Firm Y

Value of Output by Firm Y = viii + ( ii – iii ) = 250 + ( 15 – 10 ) = ₹ 255

Value added by firm Firm Y (GVA at MP by Firm Y) = Value of Output – Intermediate consumption (purchases by firm Y from firm X)

Value added by Firm Y = 255 – 80 = ₹ 175 lakh

Note:-

Item (x) is already included in item (viii) and so it is not considered.

10. Calculate Value Added by Firms A and B from the following data:-

S.N	Items	(₹ lakh)
i)	Purchases by Firm B from Firm A	40
ii)	Sales by Firm B	80
iii)	Imports by Firm B	10
iv)	Rent paid by Firm B	5
v)	Opening stock of Firm B	15
vi)	Closing Stock of Firm B	20
vii)	Purchases by Firm A from Firm B	20
viii)	Closing Stock of Firm A	20
ix)	Opening Stock of Firm A	10

Solution:-

Calculation of Value Added by Firm A

Value of Output by Firm A = Sales + Change in Stock (Closing Stock – Opening Stock)

Value of Output by Firm A = i + ( viii – ix ) = 40 + (20 – 10) = ₹ 50

Value Added by Firm A = Value of Output – Intermediate Consumption (Purchases by Firm A from Firm B)

Value Added by Firm A = 50 – 20 = ₹ 30

Calculation of Value Added by Firm B

Value of Output by Firm B = Sales + Change in Stock (Closing Stock – Opening Stock)

Value of Output by Firm B = ii + (vi – v) = 80 + (20 – 15) = ₹ 85

Value Added by Firm B = Value of Output – Intermediate Consumption (Purchases by firm B from firm A + Imports by firm B)

Value Added by Firm B = 85 – ( 40 + 10 ) = ₹ 35 lakh

Read Here:- 50 Important Numerical of Income Method of National Income class 12

Read Here:- 50 Important Numerical of Expenditure Method of National Income Class 12

11. Calculate net value added at factor cost:-

S.N	Items	(₹ Crore)
i)	Subsidies	5
ii)	Sales	500
iii)	Intermediate Consumption	200
iv)	Closing Stock	40
v)	Consumption of fixed capital	60
vi)	Indirect tax	30
vii)	Opening Stock	50

Solution:-

Value of Output = Sales + Change in Stock (Closing Stock – Opening)

Value of Output = ii + ( iv – vii) = 500 + (40 – 50) = ₹ 490

Gross Value Added at Market Price (GVA at MP) = Value of Output – Intermediate Consumption

GVA at MP = 490 – 200 = ₹ 290

Net Value Added at Factor Cost (NVA at FC) = GVA at MP – Consumption of fixed capital – Net Indirect tax (Indirect tax – Subsidy)

NVA at FC = 290 – 60 – ( 30 – 5) = ₹ 205 crore

12. From the following information about firm X, calculate gross value added by it.

S.N	Items	(₹ lakh)
i)	Domestic Sales	300
ii)	Exports	100
iii)	Production for Self Consumption	50
iv)	Purchases from firm A	110
v)	Purchases from firm B	70
vi)	Imports of raw materials	30
vii)	Change in Stock	60

Solution:-

Value of Output = Sales (Domestic Sales + Production for Self Consumption + Exports) + Change in stock (Closing Stock – Opening Stock)

Value of Output = (i + ii + iii) + vii = (300 + 100 + 50) + 60 = ₹ 510

Gross Value added by Firm X (GVA at MP) = Value of Output – Intermediate Consumption (Purchases from firm A + Purchases from Firm B + Imports of Raw materials)

Gross Value Added by firm X 510 – (110 + 70 + 30) = ₹ 300 lakh

13. From the following data, find out value added by firm X:

S.N	Items	(₹ lakh)
i)	Sales by Firm Y to Firm X	400
ii)	Sales by Firm X to households	500
iii)	Purchases by firm Z from Firm X	300
iv)	Opening stock of firm X	25
v)	Closing stock of firm X	75

Solution:-

Value of Output = Sales (Sales by Firm X to households + Purchases by firm Z from firm X) + Change in stock (Closing Stock by firm X – Opening stock of Firm X)

Value of Output = ( ii + iii) + ( v – iv) = ( 500 + 300 ) + ( 75 – 25 ) = ₹ 850

Value added by Firm X = Value of Output – Intermediate Consumption (sales by Firm Y to firm X)

Value added by Firm X = 850 – 400 = ₹ 450 lakh

14. Calculate (a) Value of output and (b) Net Value added at factor cost from the following data:

S.N	Items	(₹ lakh)
i)	Goods and services tax	100
ii)	Sales	1000
iii)	Operating Surplus	60
iv)	Opening Stock	200
v)	Consumption of fixed capital	50
vi)	Closing Stock	200
vii)	Intermediate cost	600
viii)	Subsidies	40

Solution:-

Value of Output = Sales + Change in stock (Closing Stock – Opening Stock)

Value of Output = ii + (vi – iv) = 1000 + (200 – 200) = ₹ 1000

Gross Value added at Market Price (GVA at MP) = Value of Output – Intermediate Consumption (intermediate cost)

GVA at MP = 1000 – 600 = ₹ 400

Net Value added at factor cost = GVA at MP – depreciation (consumption of fixed capital) – Indirect tax (Goods and service tax – subsidies)

NVA at FC = 400 – 50 – (100 – 40) = ₹ 290 lakh

14. From the data of a firm given alongside, find out net value added at factor cost:

S.N	Items
i)	Total Sales	75000
ii)	Purchase of raw materials and other inputs	30000
iii)	Indirect tax	7500
iv)	Consumption of fixed capital	2500

Value of Output = Sales + Change in stock

Value of Output = 75000 + 0 = ₹ 75000

Gross value added at Market Price = Value of Output – Intermediate consumption ( Purchase of raw materials and other inputs)

GVA at MP = 75000 – 30000 = 45000

Net Value Added at Factor Cost = GVA at MP – Depreciation (consumption of fixed capital) – Net indirect tax (Indirect tax – subsidy)

NVA at MP = 45000 – 2500 – (7500 – 0)

NVA at MP = ₹ 35000

15. Given the following data, find the Net Value Added at Factor Cost by Farmer producing wheat.

S.N	Items	(₹ in crore)
i)	Sale of wheat by the farmer in the local market	6,80,000
ii)	Purchase of a tracter	5,00,000
iii)	Procurement of wheat by the government from the farmer	20,000
iv)	Consumption of wheat by the farming family during the year	5,000
v)	Subsidy	2,000
vi)	Expenditure on the maintenance of existing capital stock	10,000

Solution:-

Sales = i + iii + iv = 680000 + 20000 + 5000 = ₹ 705000

Value of Output = Sales + Change in Stock

Value of output = 705000 + 0 = 70500

Gross value added at MP = Value of output – Intermediate consumption (Expenditure on the maintenance of existing capital stock)

GVA at MP = 705000 – 10000 = ₹ 695000

Net value added at factor cost = GVA at MP – consumption of fixed capital – Net indirect tax (indirect tax – subsidy)

NVA at FC = 695000 – (0 + 2000) = ₹ 697000

16. Calculate Net Value Added at Factor Cost from the following data:-

S.N	Items	(₹ in crore)
i)	Purchase of Machinery to be used in the production unit	100
ii)	Sales	200
iii)	Intermediate Costs	90
iv)	Indirect taxes	12
v)	Change in stock	10
vi)	Excise Duty	6
vii)	Stock of Raw Material	5

Solution:-

Value of Output = Sales + Change in stock

Value of Output = ii + v = 200 + 10 = ₹ 210

Gross Value added at Market Price = Value of Output – Intermediate Costs

GVA at MP = 210 – 90 = 120

Net Value added at Factor cost = GVA at MP – Depreciation – Net Indirect tax (Indirect tax – subsidy)

NVA at FC = 120 – 0 – (12 – 0) = ₹ 108 crore

17. From the following data relating to a firm, calculate its Net Value Added at Factor Cost:

S.N	Items	(₹ in lakh)
i)	Subsidy	40
ii)	Sales	800
iii)	Depreciation	30
iv)	Exports	100
v)	Closing Stock	20
vi)	Opening Stock	50
vii)	Intermediate purchases	500
viii)	Purchase of Machinery for own use	200
ix)	Import of raw material	60

Solution:-

Value of Output = Sales + Change in stock (closing stock – opening stock)

Value of Output = 800 + (20 – 50) = 770

Gross value added at Factor cost = Value of Output – intermediate consumption

GVA at MP = 770 – 500 = 270

Net Value added at Factor cost = GVA at MP – Depreciation – Net Indirect tax (Indirect tax – subsidy)

NVA at Fc = 270 – 30 – ( 0 – 40) = ₹ 280 lakh

Notes:- Exports are not considered as it is already included in Sales.

18. Calculate Gross Domestic Product at Market Price by Production Method.

S.N	Items	₹ crore
i)	Intermediate consumption of: a) Primary sector b) Secondary Sector c) Tertiary Sector	500 400 300
ii)	Value of Output a) Primary Sector b) Secondary Sector c) Tertiary Sector	1000 900 700
ii)	Rent	10
ix)	Emoluments of Employees	400
v)	Mixed Income	650
vi)	Operating Surplus	300
vii)	Net Factor Income from abroad	– 20
viii)	Interest	5
ix)	Consumption of fixed capital	40
x)	Net Indirect tax	10

Solution:-

GDP at MP = Value of Output – Intermediate Consumption

GDP at MP = ( iia + iib + iic ) – ( ia + ib + ic )

GDP at MP = ( 1000 + 900 + 700 ) – ( 500 + 400 + 300 )

GDP at MP = 2600 – 1200

GDP at MP = 1400 crore

19. Calculate Gross Domestic Product at market price from the following data:-

S.N	Items	(₹ lakh)
i)	Net Value added at market price by: a) Primary Sector b) Secondary Sector c) Tertiary Sector	700 1000 1000
ii)	Net Exports	– 10
iii)	Net Indirect tax	100
iv)	Value of Intermediate consumption in: a) Primary Sector b) Secondary Sector c) Tertiary Sector	200 300 300
v)	Consumption of fixed capital in: a) Primary Sector b) Secondary Sector c) Tertiary Sector	20 50 30

GDP at MP = Net Value at added at MP + Depreciation

GDP at MP = (ia + ib + ic) + (va + vb + vc)

GDP at MP = (700 + 1000 + 1000) + (20 + 50 + 30)

GDP at MP = 2700 + 100

GDP at MP = 2800 lakh

20. Calculate Net Value Added at factor cost from the following data:0

Items	(₹ in crore)
1. Purchase of machinery to be used in the production unit.	100
2. Sales	200
3. Intermediate costs	90
4. Indirect taxes	12
5. Changes in Stock	10
6. Excise duty	6
7. Stock of Raw Material	5

Solution:-

Value of Output = Sales + change in stock

Value of Output = 200 + 10 = 210

GDP at MP = Value of Output – Intermediate consumption

GDP at MP = 210 – 90

GDP at MP = 120

Net Value added at factor cost (NDP at FC) = GDP at MP – consumption of fixed capital – Net Indirect tax (Indirect tax – subsidy)

NVA at FC = 120 – 0 – ( 12 – 0 )

NVA at FC = ₹ 108 crore

21. Find NVA at FC from the following.

Items	(₹ in crore)
1. Sales	800
2. Taxes on production	50
3. Depreciation	70
4. Opening Stock	100
5. Closing Stock	80
6. Intermediate cost	200

Solution:-

Value of output = Sales + Closing stock – Opening stock

Value of Output = 800 + 80 – 100

Value of Output = 780

GDP at MP = Value of output – Intermediate cost

GDP at MP = 780 – 200

GDP at MP = ₹ 580

NVA at FC = GDP at MP – Depreciation – Taxes on production

NVA at FC = 580 – 70 – 50

NVA at FC = ₹ 460 lakh

22. Calculate GVA at MP from the following:-

Items	(₹ in crore)
1. Purchase by Firm A from Firm B	100
2. Purchase by Firm B from Firm A	150
3. Sales by Firm A	200
4. Sales by Firm B	300
5. Exports by Firm B	30
6. Change in stock of Firm A	– 20
7. Change in stock of Firm B	10

Solution:-

GVA at MP by A = Sales by Firm A + Change in stock of Firm A – Purchase by firm a From Firm B

GVA at MP by A = 200 – 20 – 100

GVA at MP by A = ₹ 80 crore

GVA at MP by B = Sales by Firm B + Change in sock of Firm B – Purchase by Firm B from Firm A

GVA at MP by B = 300 + 10 – 150

GVA at MP by B = ₹ 160 crore

Note:- item 5th was not considered as it is already included in sales of B. Purchase from one firm by another firm is considered as intermediate consumption.

23. Calculate national income from the following data. Assume that there are only two properties, firm A and Firm B in the economy:

Items	(₹ in crore)
1. Purchases of materials, etc. by Firm A from Firm B	20
2. Purchases of materials, etc. by Firm B from Firm A	30
3. Value of output produced by Firm A	100
4. Value of output produced by Firm B	80
5. Payment of indirect tax by Firm A	10
6. Payment of indirect tax by Firm B	5
7. Consumption of fixed capital by Firm B	5
8. Consumption of fixed capital by Firm A	10
9. net change in stocks of Firm A	– 7
10. Net change in stock of Firm B	7
11. Net factor income from abroad	– 5

Solution:-

Value added by Firm A (GDP at MP) = Value of output Produced by Firm A – Purchases of material, etc by firm A from firm B

Value added by Firm A = 100 – 20 = 80

Value added by Firm B = Value of output produced by Firm B – Purchases of material, etc. by firm B from Firm A

Value added by Firm B = 80 – 30 = 50

GDP at MP = Value added by Firm A + Value added by Firm B

GDP at MP = 80 + 50 = ₹ 130

NNP at FC = GDP at MP – Consumption of fixed capital by firm A – consumption of fixed capital by firm B + net factor income from abroad – payment of indirect tax by firm A – payment of indirect by Firm B

NNP at FC = 130 – 10 – 5 – 5 – 10 – 5

NNP at FC = ₹ 95 crore

24. Calculate GDP at MP and NDP at FC from the following data. Assume that there are only two sectors A and B in the economy.

Items	(₹ in crore)
1. Closing stock of sector A	20
2. Opening stock of sector B	5
3. Opening stock of sector A	30
4. Closing stock of sector B	15
5. Sales by sector B	200
6. Sales by sector A	150
7. Goods and Services tax paid by section A	15
8. Consumption of fixed capital by sector B	10
9. Consumption of fixed capital by sector A	10
10. Subsidies to sector B	5
11. Intermediate consumption by sector A	70
12. Intermediate consumption by sector B	60
13. Net factor income from abroad	10

Solution:-

Value added by sector A = Sales by sector A + Closing stock of sector A – Opening stock of sector A – Intermediate consumption by sector A

Value added by sector A = 150 + 20 – 30 – 70

Value added by sector A = 70

Value added by sector B = Sales by sector B + Closing stock of sector B – Opening stock of Sector B – Intermediate consumption by sector A

Value added by sector B = 200 + 15 – 5 – 60

value added by sector B = 150

GDP at MP = Value added by sector A + Value added by sector B

GDP at MP = 70 + 150

GDP at MP = 220

NDP at FC = GDP at MP – consumption of fixed capital by sector A – consumption of fixed capital by sector B – Goods and services tax paid by sector A + subsidies to sector B

NDP at FC = 220 – 10 – 10 – 15 + 5

NDP at FC = ₹ 190 crore

25. From the following data, calculate “gross value added at factor cost.”

Items	(₹ in crore)
1. Sales	180
2. Rent	5
3. Subsidies	10
4. Change in stock	15
5. Purchase of raw materials	100
6. Profits	25

Solution:-

value of output = Sales + change in stock

Value of Output = 180 + 15

Value of Output = 195

Gross Value added at MP (GDP at MP) = Value of Output – purchase of raw materials

GDP at MP = 195 – 100

GDP at MP = 95

Gross value added at factor cost = GDP at MP – indirect tax + subsidies

Gross value added at factor cost = 95 – 0 + 10

Gross Value added at factor cost ₹ 105

26. From the following data, calculate “gross value added at factor cost.”

Items	(₹ in crore)
1. Net indirect tax	20
2. Purchase of intermediate products	120
3. Purchase of machines	3oo
4. Sales	250
5. Consumption of fixed capital	20
6. Change in stock	30

Solution:-

Value of output = Sales + Change in stock

Value of output = 250 + 30

Value of output = 280

gross value added at MP (GDP at MP) = Value of output – purchase of intermediate products

gross value added at MP = 280 – 120

gross value added at MP = 160

gross value added at FC = gross value added at FC – Net indirect tax

gross value added at FC = 160 – 20

gross value added at FC = ₹ 140 crore

27. Calculate Net Value added at Market Price from the following data:-

Items	(₹ in crore)
1. Depreciation	5
2. Sales	100
3. Opening stock	20
4. Intermediate consumption	70
5. Excise Duty	10
6. Change in stock	– 10

Solution

Value of Output = Sales + change in stock

Value of Output = 100 – 10 = 90

GDP at MP = Value of Output – Intermediate consumption

GDP at MP = 90 – 70

GDP at MP = 20

Net value added at MP = GDP at MP – Depreciation

Net Value added at MP = 20 – 5

Net Value added at MP = ₹ 15 crore

28. Calculate Gross Value Added at Factor Cost:-

Items	(₹ in crore)
1. Units of output sold (units)	1000
2. Price per unit of output	30
3. Depreciation	1000
4. Intermediate cost	12000
5. Closing stock	3000
6. Opening stock	2000
7. Excise	2500
8. Sales Tax	3500

Solution:-

Value of Output = Units of output sold * Price per unit of output + Closing stock – Opening stock

Value of Output = 1000 * 30 + 3000 – 2000

Value of Output = 30000 + 1000

Value of Output = 31000

GDP at MP = Value of output – intermediate cost

GDP at MP = 31000 – 12000

GDP at MP = 19000

Gross value added at Factor Cost = GDP at MP – Excise – sales tax

Gross value added at Factor Cost = 19000 – 2500 – 3500

Gross Value added at Factor Cost = ₹ 13000

Further Reading

S.N	Topics
1.	What is Macroeconomics
2.	What are Goods in economics
3.	What are Consumption Goods
4.	What are capital goods
5.	What are intermediate Goods
6.	What is intermediate consumption
7.	What are final Goods
8.	What is Final Consumption
9.	What is investment in economics
10.	What is stock and flow
11.	What are transfer payments
12.	What is circular flow of income
13.	What is Domestic Territory of a Country
14.	What is normal resident of a country
15.	Nominal GDP and Real GDP

S.N	Topics
1.	What is GDP Deflator
2.	What are externalities in economics
3.	Limitations of GDP as a measure of welfare

S.N	Topics
1.	National Income and Related Aggregates, formula, Definition, process
2.	Value added Method, formula, Definition, process
3.	Income Method, formula, Definition, process
4.	Expenditure Method, formula, Definition, process
5.

S.N	Topics
1.	150+ Numerical of Value Added Method
2.	150+ Numerical of Income Method
3.	150+ Numerical of Expenditure Method
4.	150+ Numerical of National Income and related aggregates

S.N	Topics
1.	250+ MCQs of National Income