Detailed explanation of export commodity quotation calculation

Export commodity quotation accounting is a complex process, involving the calculation of costs, expenses and expected profits in multiple links. This article aims to systematically introduce the key elements in this process and its calculation methods.

Accounting of total domestic costs

The total domestic cost refers to all expenses incurred by the company before exporting the product domestically, including but not limited to procurement costs, domestic transportation costs, customs declaration fees, etc., and export tax rebate income needs to be deducted. The specific formula is as follows:

• Total domestic cost = procurement cost + domestic expense – export tax rebate

Among them, export tax rebate can be calculated by the following formula:

• Export tax rebate = [Purchase cost / (1 + VAT rate)] × tax rebate rate

Domestic fees can be calculated precisely or estimated using a flat rate (such as 5%).

FOB price calculation

FOB (Free On Board) price is one of the most common quotation methods in international trade. The calculation formula is:

• FOB price = (total domestic cost + profit) / bank exchange rate

It should be noted that the profit part may be set based on the cost price or the sales price.

Other trade term price calculation

In addition to FOB, there are several commonly used trade terms, such as CFR (Cost and Freight, cost plus freight), CIF (Cost Insurance and Freight, cost plus insurance plus freight). They are calculated as follows:

• CFR price = FOB price + international freight
• CIF price = CFR price / [1 – (1 + insurance markup rate) × insurance rate]

Normally, the insurance bonus rate is 10%, but if it exceeds this rate, you need to obtain the consent of the insurance company.

Detailed analysis of export costs and fees

Export costs

Export costs refer to the direct costs incurred by an enterprise to produce, process or purchase products, including production costs, processing costs or procurement costs, etc.

Fees

Expenses are divided into two categories: domestic expenses and foreign expenses. The former covers packaging fees, warehousing fees, domestic transportation fees and other expenses; the latter mainly involves export freight, insurance and commissions (if any).

Expected profit

Expected profit is an important part of the export quotation, which can usually be expressed in the form of a fixed value or profit margin. The basis for calculating profit margin may be cost price or sales price.

Freight calculation

There are various modes of transportation for import and export goods, including liner transportation, container transportation, etc. Shipping costs consist of base shipping plus additional charges.

Insurance premium accounting

Under CIF or CIP conditions, the exporter also needs to bear insurance costs. The calculation formula is as follows:

• Insurance premium = Insurance amount × Insurance rate
• Insured amount = CIF price × (1 + insurance markup rate)

Commission accounting

When both parties agree on a commission-inclusive price, it can be calculated by the following formula:

• Price including commission = Net price / (1 – Commission rate)

In summary, export commodity quotation calculation is a detailed and complex task that requires comprehensive consideration of various costs, expenses, profits and other factors. Correct understanding and application of relevant formulas can help ensure that quotations are accurate and reasonable, thereby improving corporate competitiveness.