Question
An overseas distributor would like to market a product that you are currently manufacturing for local consumption.Pertinent data is as follows: Domestic list price per
An overseas distributor would like to market a product that you are currently manufacturing for local consumption.Pertinent data is as follows:
Domestic list price per unit$3,500.
Product cost, including profit margin$550.
Surplus production capacity available for export:10,000 units.
Total sales and marketing for the export market:$30,000.
Preparation for shipping per unit:$100.
Inland transportation cost per unit:$25.
Port and loading charges per unit:$25.
Main carriage "maritime transport"per unit:$35.
Maritime insurance per unit:$10.
Unloading charges per unit:$5.
Duties (import and delivery):10%
Total international financing cost:$30,000.
Assuming the company utilized 100% of its surplus production capacity for the proposed export, the total per unit cost of exporting would be:
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