You just graduated from college. You and your friend (who is a culinary expert) were able to obtain a bank loan and pool money to start a chain of bakeries. Your signature product is a special type of muffin called Aztec Muffin (coined because of your fond memories of times spent in college).

At one of the trade shows that you attended with your partner, you were approached by an interested dry foods distributor from Krakow, Poland, who foresees a great opportunity for sales of your muffins in his home country. You decided that you will ship him a container full of the special dough mix used to make your signature product. At this point, the mix is packaged in .75 kg cans and packaged in cases of twelve. Your cost of the mix is $3 per can. You are considering a price of $42/case. Using the information below, please answer the following:

1. What is the total landed cost per can under DDP Krakow (via Port of Long Beach and Gdansk).
2. Will you make a profit or lose money on this deal?

In preparing your answers, you need to take the following into consideration:

• • Maximize the space in the container (i.e. fill it with as many cases as possible)
  • Cases contain 12 cans (Case dimensions: W33 x L35 x H26 cm. However, the cases MUST be stored upright!!)
  • Export packing: $240
  • Trucking (San Diego Port of Long Beach): $230
  • Port of Long Beach:
    • Terminal and loading charges: $150
    • Container W90 x L240(or 20) x H90: $2,500
• Port of Gdansk:
  • Handling: $120
  • Clearance Fees: $200
  • Duties (you must pick one of the following feel free to access the Internet to confirm):
    • Commodity code: 1901.20.0015 $0.30/kg

(this is given to you but do you remember where you would find it?)

• Trucking (Gdansk Krakow): $320
• Basic Marine Insurance: $.385 per $100 value of shipment

Important Note: Inch = 2.54 cm