What is fob value of sale of export .

A/c entries 1836 views 2 replies

Dear all

             I want to known that what is FOB Value of export Sales.  Suppose that export sales  C &F USD 5000 @ 60 =3,00,000.00  as per shipping bill Freight Shown in Shipping in Rs. 50,000/-   and acutual freight have 60,000.00  as per Bill of landing. What is accounting entry ?.

I thing entry should be

Party A/c             3,00,000.00

Fright outward                             60,000.00

export sales                             2,40,000.00

above entry is right or not.   I have freight less actual freight  as per Bill of landing. Please conifrm on urgent basis. What is Fob Value find out.

Thank in advance all senior

Ramanuj

 

Replies (2)

Annex 3-2 
Method of Calculation of FOB Value 
 
1. FOB Value shall be calculated as follows: 
 
(a) FOB Value = Ex-Factory Price + Other Costs 
 
(b) Other Costs in the calculation of the FOB value shall refer to the costs 
incurred in placing the goods in the ship for export, including but not 
limited to, domestic transport costs, storage and warehousing, port 
handling, brokerage fees, service charges, et cetera. 
 
2. Formula for ex-factory price: 
 
(a) Ex-Factory Price = Production Cost + Profit 
 
(b) Formula for production cost, 
 
(i) Production Cost = Cost of Raw Materials + Labour Cost + 
Overhead Cost 
 
(ii) Cost of Raw Materials shall consist of: 
 
(AA) Cost of raw materials 
 
(BB) Freight and insurance 
 
(iii) Labour Cost shall include: 
 
(AA) Wages 
 
(BB) Remuneration 
 
(CC) Other employee benefits associated with the 
manufacturing process 
 
(iv) Overhead Costs, (non-exhaustive list) shall include, but not 
limited to: 
 
(AA) real property items associated with the production process 
(insurance, factory rent and leasing, depreciation on 
buildings, repair and maintenance, taxes, interests on 
mortgage) 
(BB) leasing of and interest payments for plant and equipment (CC) factory security
(DD) insurance (plant, equipment and materials used in the 
manufacture of the goods) 
(EE) utilities (energy, electricity, water and other utilities directly 
attributable to the production of the good) 
(FF) research, development, design and engineering 
(GG) dies, moulds, tooling and the depreciation, maintenance 
and repair of plant and equipment 
(HH) royalties or licenses (in connection with patented 
machines or processes used in the manufacture of the 
good or the right to manufacture the good) 
(II) inspection and testing of materials and the goods 
(JJ) storage and handling in the factory 
(KK) disposal of recyclable wastes 
(LL) cost elements in computing the value of raw materials, i.e. 
port and clearance charges and import duties paid for 
dutiable component. 

refer this link

/forum/calculation-of-fob-value-57334.asp#.UodbztKBmlc


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