How is the supplier’s product quotation composed?

By justchinait
October 26, 2020

How to express export prices

Generally, it is expressed in two ways: Unit Price and Total value.

The unit price is composed of currency, amount, unit of measurement, and trade terms.

Such as USD 30 per ton CIF Tokyo

USD30.00/Ton CIF Tokyo

The total value is the product of the unit price and the quantity.

The composition of export prices

Prices in international trade are mainly composed of costs, expenses, and profits.

1. cost

Cost is the core of the entire price. It is the production cost, processing, or purchase cost incurred by exporting enterprises or foreign trade units for shipping their products for production, processing, or purchase. We usually call it the tax-included cost.

2. Expenses

The expenses in the export quotation mainly consist of domestic and foreign payments. Internal costs mainly include: packaging fees, storage fees, local transportation fees, certification fees, port fees, commodity inspection fees, taxes, interest on purchases, operating management fees, bank fees, etc.; foreign prices include export freight, export insurance fees, etc. , Commissions, etc.

3. Expected profit

Critical points of export quotation accounting

1. Cost accounting

Generally speaking, the cost we have is the purchase cost or tax-included cost; that is, it includes the added tax. However, to reduce the cost of export commodities and enhance their competitiveness in the international market, many countries often adopt the practice of refunding all or part of the value-added tax on export commodities. In the case of the implementation of the export tax rebate system, when calculating the price of export commodities, the tax part of the purchase cost should be deducted according to the export tax rebate ratio to obtain the actual purchase cost.

Actual purchase cost = tax-included cost-tax refund income

Tax refund income = tax-included cost X export tax refund rate / (1 + value-added tax rate)

From this, the formula for the actual purchase cost is derived:

Actual purchase cost = tax-included cost [1-export tax rebate rate/(1+value-added tax rate)]

For example, the purchase cost per unit of a product is 28 yuan, including 17% value-added tax. If the product has a 13% tax rebate for export, then the actual purchase cost per unit of the product = tax-included cost [1-export Tax rebate rate/(1+VAT rate)]=28[1-13%(1+17%)]=24.89 RMB/unit.

2. Freight accounting

Generally, the freight of each individual is calculated = freight ÷ [(cabin volume ÷ volume of each large box) × number of each box]

3. Insurance premium accounting

Insurance premium = insurance amount × insurance premium rate

Insurance amount = CIF price X (1 + insurance premium rate)

CIF quotation=CNF/[1-(1+insurance mark-up rate) X insurance rate]

4. Commission

In the export quotation, sometimes the other party requires a commission to be included. At this time, it is called the price with the commission.

Including commission price=net price/(1-commission price)

5. Expected profit accounting

Profit is one of the three components of the export price, and the export enterprise determines the export price, including the benefit. The determination of profit can be expressed by a certain amount or by the profit rate or percentage. When showing the profit rate, you should pay attention to the base of the computer. You can use a specific cost as the base for calculating the profit, and you can also use the sales price as the base for calculating the benefit.


The production cost of exporting a particular commodity is 185 yuan per unit. The various export expenses are 13.5. If the company’s profit is 10%, the company will quote the FOB price and try to calculate the benefit based on the production cost, export cost, and export price.

The profit calculated based on the production cost is:


The amount of profit calculated based on export costs is:


The profit calculated based on the FOB export price is:


6. Quotation accounting for FOB, CFR, and CIF

FOB quotation = (actual purchase cost + the sum of various domestic expenses)/(1-expected profit margin)

CFR (CNF) quotation = (actual purchase cost + the sum of various domestic expenses + foreign freight) / (1-expected profit margin)

CIF quotation = (actual purchase cost + the sum of various domestic expenses + foreign freight)/[1-expected profit rate-(1+insurance bonus rate) X insurance rate]

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