Summary of Export Price Costing

Here are some basic example of how costing can be done in local Malaysian currency and thereafter, can be easily converted to foreign currency for export pricing of product.

1.- Determine Product Cost -in your local currency
2.- Determine Factory Sales Price - in your local currency
3.- Determine Shipping Cost - in your local currency
4.- Total the above costing and convert into foreign current to
      arrive at your export price  in foreign currency

1. Determine the cost of your product by:

a. Materials Cost ............................... = RM ?

b. Labor Cost ..................................... = RM ?

c. Factory overhead ........................ = RM ?

d. Administration Cost...................... = RM ?

e. Selling Costs ................................. = RM ?
    (phone, telex, cables, travel etc.)

f. Advertising, catalogues etc. .......= RM ?
 

=========
Add up all the above cost
to arrive at your Product Cost
                                                             =========

Next:

2. Determine Export Cost

a. Use your above Product Cost   = RM ?

b. Add Crating cost ............................... = RM ?

c. Add Forwarding cost  ....................... = RM ?

d. Add Documentation cost ...............  = RM ?

e. Add Product Insurance cost ..........  = RM ?

f. Deduct Duty Drawback, if any ......... = RM?

g. Add your required Profit .................   = RM ?
                                                             ==========
Total it up, this will be your Basic selling price

h. Add Agent's commission ..............  = RM ?

i. Add Bank Interest ..............................  = RM ?

                                                         =============
This will be your Factory sales price or Ex Works Price
                                                          =============

Next

3. Determine Export Shipping Cost

a. Use your above Ex Works Price ..........................  = RM ?

b. Add Local Inland Freight Wharfage Charge etc. ... = RM ?
                                                                                               ========
                         Total it up and this is now your FOB price

c. Add Ocean/Air Freight Marine Insurance ...............  = RM ?
                                                                                         ==========
                         Total it up and this is now your CIF price

Next

4. Determine your Export Price in US$

Take your above CIF price ........................................  = RM ?

Add the charges for shipping your goods to
the foreign port of entry (CIP) ...................................  = RM ?
                                                                                        =========
Total it up and
convert it into foreign currency at current exchange rate and this will be your C.I.F. export price to the foreign port of entry in US$ currency.