KNOTT FASHION STUDIO (LAXIMI NAGAR) DELHI HAS TO QUOTE THE FOB PRICE FOR A SHIPMENT OF 2000LADIES CO-ORDINATE DRESSES TO AN IMPORTER IN USA THE EXPORTER PRICIING PLOLICY OF M/S KNOTT FASHION STUDIO HAS BEEN TO EARN 25 PERCENT PROFIT MARGIN ON THE COST OF PRODUCTION .IT IS ALSO KNOWN THAT SAME ITEM IMPORTED FROM OTHER COUNTRIES IS ON SALE IN THE RETAIL STORES IN USA AT $20 PER DRESS.FOLLOWING COST AND MARKET DATA:
COST AND MARKET DATA
variable prodocution expoenses per dress RAW METERIAL $ 2.00, LABOUR $1.00,OVERHEAD $0.50
PAKING EXPENSES PER BOX $ 40.00(TEN BOXES REQUIRED FOR ALL 2000 DRESES)
OTHER ITEMS PER BOX: NEWS PRINT $ 8.00, POLYTHYLENE BAGS $ 4.00, STENCIL MARKING $ 1.50
DOCUMENTATION $ 10.00
EXPORT CREDIT INSURANCE $ 30.00
OCEAN FREIGHT $ 830.00
MARINE INSURANCE $ 140.00
HANDLING CHARGES IN USA $ 10% CIF PRICE
TARIFF IN USA 20% ON CIF PRICE
SALES TAX 10% ON LANDED COST
WHOLESALER MARK UP 30% ON WHOLE SALLER COST
RETAILSER'S MARK UP 100% ON RETAILERS COST
FROM THE INFORMATION GIVEN ABOVE YOU ARE REQUIRED TO :
1) COMPUTE THE FOB PRICE QUOTATION AND
2) RETAIL PRICE AT WHICH THE DRESS WOULD SELL IN USA
DO YOU THINK YOUR PRICE QUOTION IS COMPETITIVE ? WOULD IT MAKE ANY DIFFERENCE IF THE QUANTITY IN INCREASE TO 5000 DRESSES.
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