Question: In this scenario, you are the Buyer. You have been offered the

sale of Widgets and received the below comprehensive cost breakdown reference sheet. The

Buyer or Seller and INCOTERM columns have been added for you as a guide to answer the

following questions (down at the bottom of this question). NOTE: Unload Main Carrier

Charges and Destination Terminal Charges will always be paid by the Buyer in all 3 below

INCO Terms scenarios.

a. What is the purchase price (as the Buyer) you would pay to the Seller under the

following INCOTERMS? These are the costs the seller would include when creating its

price to you as the Buyer. Please fill in the below Reference Table. 20 pts

i. Ex. Works

ii. FOB

iii. CIF

b. Where does risk transfer for each of the above 4 INCOTERMS?

c. While cost is an obvious factor in deciding which INCOTERM to utilize, there are other

factors to consider when making this decision. Which INCOTERM would you use and

why?

d. Using 10,000 Units, what is the FOB Price Per Unit (using the total FOB Cost you entered

in the table above for question 6(a)?

INCO TERM TOTAL QUOTE COST Ex. Works FOB CIF Buyer or Seller? - Ex. Works Buyer or Seller? - CIF Buyer or Seller? - FOB Quote $300.00 $220.00 $150.00 Cost Type Export Packing Marking and Labeling Export Clearance (License, EEI, AES) Inland Freight to the Main Carrier Origin Terminal Charges Vessel Loading Charges Ocean Freight Marine Insurance Unload Main Carrier Charges Destination Terminal Charges Customer Broker Clearance Fees Duty, Customs Fees, Taxes Delivery to Buyer's Facility (i.e. Destination) Total $325.00 $305.00 $235.00 $4,250.00 $400.00 $275.00 $225.00 $150.00 $5,000.00 $350.00 $12,185.00 INCO TERM TOTAL QUOTE COST Ex. Works FOB CIF Buyer or Seller? - Ex. Works Buyer or Seller? - CIF Buyer or Seller? - FOB Quote $300.00 $220.00 $150.00 Cost Type Export Packing Marking and Labeling Export Clearance (License, EEI, AES) Inland Freight to the Main Carrier Origin Terminal Charges Vessel Loading Charges Ocean Freight Marine Insurance Unload Main Carrier Charges Destination Terminal Charges Customer Broker Clearance Fees Duty, Customs Fees, Taxes Delivery to Buyer's Facility (i.e. Destination) Total $325.00 $305.00 $235.00 $4,250.00 $400.00 $275.00 $225.00 $150.00 $5,000.00 $350.00 $12,185.00