The following invoice is for a UK camping-goods retailer importing 600 rechargeable lanterns from a company in Vietnam. The goods cost US$9000. The exchange...
Question 1 Report
The following invoice is for a UK camping-goods retailer importing 600 rechargeable lanterns from a company in Vietnam. The goods cost US$9000. The exchange rate used by the retailer's bank is US$1 = £0.80. Import duty is 5% of the goods value in pounds. Freight is £720 and insurance is £180.
(a) Calculate the value of the goods in pounds. [2]
(b) Calculate the import duty payable. [2]
(c) Calculate the total landed cost of the shipment, including goods, duty, freight and insurance. [2]
Answer Details
(a) Convert the US dollar goods value using the given exchange rate:
\[\$9000\times £0.80=£7200\]
The goods are worth £7200. [2]
(b) Import duty is 5% of £7200:
\[£7200\times\frac{5}{100}=£360\]
The import duty is £360. [2]
(c) Landed cost includes the goods value, duty, freight and insurance:
\[£7200+£360+£720+£180=£8460\]
The total landed cost is £8460. [2]
Download The App On Google Playstore
Everything you need to excel in your exams
