1、Chapter 5 Price of CommodityCorrectly Implement Pricing Principles Price Components of Export Commodities Export Exchange Cost Profit and Loss Ratio of Export CommoditiesForeign Exchange Earned through Export(Exchange Rate Appreciation)Four ComponentsComponents of FOB,CFR and CIF FOB CFR CIFConversi
2、on of FOB,CFR and CIF FOB CFR CIF A trading company exports 10,000 units of arts and crafts which cost 300,000 Yuan(30 Yuan per unit),other domestic cost:8000 RMB,expected profit:10%,freight:10 units/CTN,1000 cartons,carton size:255632,GW:32KG NW:30KG,the freight to Europe is calculated by W/M as 12
3、0 Dollars per ton.The price of 40 containers to Europe:3500 Dollars,insurance by 11%of the invoice value against all risks at the premium rate of 0.8%,foreign sales price:USD4.85/PC CIF London.Please calculate the export exchange cost respectively by container and by cargo.Definition Profit and Loss
4、 Ratio of Export Commodities demonstrates the ratio between the volume of export profit and Total Export Cost.The volume of export profit indicates the balance between net RMB income of export sales and total export cost.If the balance is a positive number,it means making a profit,and vice versa.The
5、 very ratio is perceived as an important index to measure the degree of export profit or loss.Formula Profit and Loss Ratio of Export Commodities=(RMB Net Income of Export Sales Total Export Cost)/Total Export Cost 100%connected to the previous onePlease calculate the profit and loss ratio of export
6、 commoditiesDefinition Foreign exchange earned through export is concluded by the ratio between certain difference calculated by export foreign exchange net income minus foreign exchange cost of raw materials and foreign exchange cost of raw materials.The ratio is universally adopted in imported mat
7、erials processing and supplied materials processing to calculate exchange rate appreciation.Formula Foreign Exchange Earned through Export(Exchange Rate Appreciation)=(Export Foreign Exchange Net Income Foreign Exchange Cost of Raw Materials)/Foreign Exchange Cost of Raw Materials 100%A trading comp
8、any imports fabric to proceed to clothing at an amount of 100,000 Dollars in CIF terms(USD9/PC CIF HAMBURG per garment).The total freight:8000 Dollars,premiums:2000 Dollars.Please calculate the exchange rate appreciation.Methods of Calculating Export Exchange Cost in Chinas Foreign Trade Practice Ex
9、port Quotation Accounting Export Counter-Offer Accounting Case One:A trading company exports a number of sports shoes to the United States.The purchasing price(Tax Price)is 50 Yuan for each shoe,the tax rebate rate is 13%,the cost rate and the expected profit rate of the company is 5%and 10%.The for
10、eign exchange rate of BOC:1Dollar=6.57 Yuan.Please calculate the FOB price of this trading.Case Two:A trading company exports 10,000 sports shoes.The purchase price(after tax)of each shoe is 70 Yuan,the tax rebate rate is 11%,fixed cost of company:5%,the price of export:9.68 Dollars per pair CIF New
11、 York,freight:4,350 Dollars,premiums:1100 Dollars.Please calculate export exchange cost.Case one A trading company exports a number of umbrellas to UK,shipped in 20-feet container,purchase price(Tax Price)charges 50 RMB each,value added tax rate:17%,tax rebate rate:9%,fixed cost(domestic cost):5%,ex
12、pected profit:10%,package cost:2,200 Dollars,40 umbrellas each carton,carton size:463826,G.W.:36kg,N.W.:20kg.The buyer requires insurance covered all risks,premium rate 0.6%,and the foreign exchange rate of BOC:1Dollar=6.57 Yuan.Commission rate:3%.The company charges a 10%profit rate at the price of
13、 USD7.52/PC CIFc3 London.Commission Calculation and Payment Methods of Commissions Discount(Rebate)Definition Commission is the remuneration for the agents who provide service for principals.During trading,commission is usually in the form of remuneration which either side of a trade provides to the
14、 middleman.For example,exporters pay commission to sales agents,or importers pay commission to purchase agents.Therefore,commission applies to the contract signed by the exporter/importer and the agents.Certain trading occurs through middlemen or agents who need to be paid commission.If the ratio of
15、 commission is defined,we call them the defined commission;otherwise,we call them undefined commission which agents may require from both sides.Calculation:by turnover valuePayment methods of commissionDefinition Discount is aimed to motivate the initiatives of the buyer,which is provided by the sel
16、ler as a concession in the contract.TypesDefined MethodsCalculation and Payment Methods of DiscountCase one Case twoCase threeA trading company exports a number of commodities abroad,the original price:2,000USD per metric ton CIF3%London,the buyer require CIF5%London.Insurance coverage for the origi
17、nal premiums against all risks including war risks,the rates was 0.8 USD and 6%,in accordance with 110%CIF price,Please calculate CFRC5%London.A UK client ordered 1000 traveling bags,requiring CIF5%Liverpool,other conditions:domestic purchase cost of traveling bags is 50 Yuan per piece,other dominat
18、e cost is 5,000 Yuan;the expected profit rate is 10%.The bags are packaged in cartons,20 per carton.Freight is 20 Dollars per carton from start port to Liverpool.Overseas shipping premium is defined as 0.8%by CIF,which adds 10%insurance against all risks and war risks.(P.S:Exchange rate of RMB again
19、st USD is 8:1.)A UK client ordered 10,000 jeans,requiring CIFc5 LONDON,premiums covering all.Purchase cost 30 RMB per jean,logistics cost:15,000 RMB,expected profit rate:10%,foreign exchange rate of BOC:1 USD=7.61/7.64RMB,commodity added-value tax rate:17%,rebate tax rate:13%,Please calculate the CI
20、Fc5 LONDON the company should charge.(P.S:25 jeans each carton,carton size:453625,G.W.35KG,N.W.32KG,freight from start harbor to London:150 USD per ton,overseas shipping premium is defined as 0.8%by W/M,which covers all insurance.)What does the price term of a contract consist of?Please exemplify.What is Export Foreign Exchange Net Income?What is Export Exchange Cost?Explain the calculation of Export Exchange Cost and Profit and Loss Ratio.Explain the calculation of Export Quotation.
