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A U.S.-based retailer is selling porcelain tile to its customers for $4.00 per square foot. Seeking to extend their profit margin, the retailer requests price

A U.S.-based retailer is selling porcelain tile to its customers for $4.00 per square foot. Seeking to extend their profit margin, the retailer requests price quotes from suppliers in China. Several respond and one is offering the tile at a bargain rate of $1.50 per square foot. The retailer quickly places an order for 14,000 square feet.

Upon receipt of the tile at their warehouse, the following was their purchase and logistics costs

Activity

Amount

Invoiced purchase price

$10,500.00

Logistics costs

Shipping fees and duties

$9,800.00

Domestic delivery cost

$4,000.00

USDA examination & x-rays

$1800.00

Storage container

$3000.00

Total Logistics costs

?

  1. What is the total landed cost?
  2. What is the landed cost per square foot?
  3. Was placing an order for 14,000 square feet from China the right decision?

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