Explaining Value Added -- Dickeson

It's called Value Added in the Ratio Studies of the Printing Industries of America. Or, you can call it PVA for "Process" Value Added—looking at it from inside the shop. From outside the plant—the customer side—we call it PVA for "Perceived" Value Added.

It's all one and the same. It's the difference between selling price of manufactured products and the cost of the raw materials converted to those products. Strip away selling price, the cost of raw materials, and outside job purchases and what you're left with is Value Added, either as a percentage or as a number.