O level Business Studies: Difference between added value and profit

O level Business Studies: Difference between added value and profit

There is a difference between added value and profit.

For instance,

 

You bought the material for chair for $10

You sold the chair for $100

The added value is $90

The profit is never going to be $90 as you would have incurred some expenses in manufacturing the chair. The expenses you might have borne while making the chair would have been the salary of the worker or other expenses.