INCOTERMS COMPUTATION

Basic Formulas:

CIF FOB+FRT + INS

CFR FOB + FRT

FOB EXW+OC

Derived Formulas:

FOB

CIF (FRTINS)

FOB

CFR-FRT

EXW

FOB-OC

CIF (OCFRT+INS)

EXW
EXWOC+ FRT

CFR

EXWOC-FRT + INS

CIF

CIF-(FOB INS)

FRT

CIF(EXW+OC+INS)

FRT

FOB x 2% (general cargo)

INS

INS

FOB x 4% (dangerous cargo)

Sample computation:
1. Mr. X importing a semi-conductor parts from Italy, determine the CIF value
if the FOB is $ 3,550.00; Freight is $ 1,250.00 and Insurance is $ 300.00.

Solution:

CIF

FOB FRT INS

CIF $ 3,550.00+S 1,250.00 S 300.00

CIF = $ 5.100.00

2. A shipment arrived from Hong Kong with FOB value of $ 5,340 and Freight
of $ 1,340.00. Determine the CFR value.

Solution:

CFR

FOB FRT

CFR S 5.340.00+$1,340.00

CFR = $ 6,680.00
3. A Seller exported a ceramics wares from China with an ex-works value of $
1.50 each and transportation cost of $ 50.00, compute the FOB value if the
total ceramics wires of 100 pes.

FOB

EXW + OC

Solution:

FOB $ 150.00$ 50,00

FOB $ 200.00

4. XYZ Enterprise importing furniture in Thailand with the CIF value of $

12,350.00, compute the amount of FOB if the freight is amounting to $
2,450.00 and insurance of $ 950.00.

Solution:

FOB = CIF(FRT+INS)

FOB $ 12.350.00 ($2.450.00 $950.00)

FOB S 12.350.00-$3,400.00

FOB $ 8,950.00
5. Determine the FOB value of the shipment coming from Germany, if the
importer paid a CFR value of S 7,650.00 and freight amounting to $ 1,650.00.

Solution:

FOB CFR-FRT

FOB $7.650.00 $ 1.650.00

FOB $6,000.00

6. An FOB value of $ 15,280.00 arrived in Port of Manila consisting of

assorted plastics cover from Vietnam, determine the ex-works value if the
seller paid a commission of $ 1,240.00 and royalty of S 2,000.00.

Solution:

EXW FOB-OC

EXW S 15,280.00 (S 1,240.00+$2,000.00)

EXW = S 15.280.00 $3,240.00

EXW $ 12,040.00

7. Ms. Z importing a brand new steel metals from Cambodia with a CIF value
of $ 21,325.00, determine the EXW value if the freight and insurance value is
$ 3,240.00, in addition, the seller paid a container rental of $ 165.00.
Solution:

EXW = CIF(OCFRT+INS)

EXW S 21,325.00 ($ 165.00+$3,240.00)

EXW S21,325.00-$3,405.00

EXW $ 17.920.00

8. Phil Land Developer importing granite from Malaysia with a factory price of
$ 3.50 per kilo and total weight of 3,500 kilos, compute the CFR value if the
seller procured the OC of S 1,230.00 and FRT of S 950.00 on the said
importation.

Solution:

CFR

EXWOC+ FRT

CFR S 12.250.00S 1.230.00 + $ 950.00

CFR $ 14,430.00

9. Compute the CIF value of a shipment arrived in MICP with the freight value
of $ 1,250.00 and insurance of S 950.00, in addition, prior to the loading in
Port in Singapore, the seller paid the ex-works value of S 5,430.00 and
transportation of $ 750.00.

Solution:

CIF EXWOC+FRT + INS

CIF

CIF

$5.430.00+$750.00 $1.250.00 $950.00

$ 8.380.00

10. A Textile Corporation based in Indonesia importing 100 rolls of white cloth
in Port of La Union with the CIF value of S 9,450.00, determine the FRT value
if the FOB is $ 7,780.00 and Insurance paid of S 110.00.

Solution:

FRT CIF(FOBINS)

FRT $ 9,450.00 (S 7,780.00+$110.00)

FRT $9.450.00 $ 7,890.00

FRT = $ 1,560.00
11. International Wooden Company importing wooden glue from India with a
CIF value of $ 5.650.00, prior to the exportation, the seller arranged and paid
for EXW value of $ 1,250.00; OC of S 650.00 and Insurance of $ 450.00,
compute the FRT value paid.

Solution: FRT CIF (EXW + OC + INS)

FRT $5,650.00 ($ 1.250.00+$650.00 $ 450.00)

FRT $5,650.00 $ 2,350.00

FRT $ 3,300.00

12. The shipment consisting of aluminum glass was arrived on June 11, 2016
at Port of Cagayan, the importer declared the CIF amount of $ 6,650.00,
Ocean Freight of $ 500.00 and Marine Insurance of S 150.00, compute the
FOB and EXW if the OC is $ 50.00.

Solution:

FOB CIF(INSFRT)

FOB S 6,650.00 ($ 150.00+$ 500.00)

FOB $6,650.00-$650.00

FOB $6,000.00

EXW FOB-OC
EXW = $6,000.00 $ 50.00

EXW = $ 5,950.00

13. Data Works Inc., importing printers and photocopy machines from Japan
with an FOB value of S 4,000.00 EXW & FRT value of $ 4,200.00, and OC of S
50.00. Determine the actual amount paid on EXW and the CFR value on this
shipment.

Solution:

EXW FOB-OC

EXW $4,000.00 $50.00

EXW = $3.950.00

EXW & $3,950.00 FRT FRT $ 4.200.00 S 4.200.00

FRT $4,200.00$ 3,950.00

FRT $ 250.00

CFR FOB + FRT

CFR S.4,000.00+S250.00

CFR S 4.250.00
14. The shipment from Dubai of car accessories arrived in NAIA with the CIF
value $ 5,650.00 and Insurance & Freight value of $ 500.00 and OC of $
150.00 incurred from the origin, determine the EXW, FOB, FRT and INS at
which is at 2% of the FOB.

Solution: EXW- CIF(OC+INS + FRT)

EXW = \$.5,650.00-(\$~150.00+\$~500.00)

EXW = \$.5.650.00-\$650.00

EXW = $ 5,000.00

FOB EXW + OC

FOB S.5.000.00+\$150.00

FOB = $ 5,150.00

INS FOB x 0.02

DS= $ 5,150.00 x 0.02

INS S 103.00

INS & FRT S 500.00

.S.103.0+FRT $ 500.00

FRT = S~500.00-S~103.00

FRT $ 397.00

15. The CRF term of shipment amounting to $ 8,175.00 assessed in the BOC
consigned to Apple Inc. and with Freight paid amounting to 7% and Other
charges of 2% of the Ex-works value, compute the

Following: A) EXW

B) FRT

C)O/C

D) FOB

Solution: CRF EXWOC FRT

CFR EXW0.02 EXW +0.07 EXW

S.8.175.00= 1.09 EXW

EXW $8,175.00

1.09
EXW $ 7,500.00

FRT EXW x 7%

FRT $ 7,500.00 x 0.07

FRT $ 525.00

OC = EXW x 2%

OC $ 7,500.00 x 0.02

= $ 150.00

FOB

EXWOC

FOB $ 7,500.00 $ 150.00

FOB $ 7,650.00

16. A Cotton Manufacturing Industry imported 10 machineries from Japan

with the CFR value of $ 6,426.00, determine the FOB, EXW, OC and FRT value
if the OC is 2% of EXW and FRT is 5% of FOB.

Solution:
EXWOC+FRT

CFR

EXW+(OC) 0.02 EXW + (FRT) 0.05 FOB

CFR

CFR $ 6,426.00 1.05

FOB $6,120.00 1.02

EXW = $ 6,000.00

OC EXW x 2%

OC $6,000.00 x 0.02

OC $ 120.00

FOB EXWOC

FOB = $6,000.00 $ 120.00

FOB $ 6,120.00
FRT FOB x 5%

FRT S 6,120.00 x 0.05

FRT

S 306.00

17. Mr. Renato Cunanan, importing tiles from England, the CIF value is $
11,200.00, Freight and Insurance is 8% and 4% of FOB respectively, compute
the FOB, FRT and INS on the said shipment.

Solution:

CIF

CIF

$ 11,200.00

FOB FRT

INS

FOB0.08 FOB

0.04 FOB
1.12 FOB

FOB

$ 11,200.00

1.12

FOB

S 10.000.00

FRT

FOB x 8%

FRT

S 10.000.00 x 0.08

FRT

S 800.00

INS

FOB x 0.04
INS

S 10.000.00

INS

S 400.00

18. The Hana Korea Inc., importing a secondhand gas pumps to Port of Subic,
Mr. Kim Soon declared the amount of $ 16,950.00 under CIF term of
shipment, other information; OC of 3% of EXW and FRT & INS OF 10% of
EXW.

Compute the following,

A) EXW

B) OC

C) FOB

D) FRT if INS is 4% of FOB

Solution:
CIF

CIF

$ 16,950.00

EXWOC + FRT + INS

EXW +0.03 EXW +0.10 EXW

1.13 EXW

EXW

$16,950,00

1.13 EXW

EXW

S 15.000.00

EXW x 3%

OC = $ 15,000.00 x 0.03

OC
S 450.00

FOB EXWOC

FOB = S 15,000.00 S 450.00

FOB S 15.450.00

FRT + INS 0.10 EXW

FRT+0.04 FOB 0.10 EXW x S 15,450.00 FOB

FRT+ (0.04 x S 15,450.00) 0.10 EXW ($ 15,000.00 EXW)

FRT$ 618.00 $ 1.500.00

FRT

$ 1,500.00$ 618.00

FRT $ 882.00

19. A 1 x 40 HC container containing electrical wirings arrived in Port of Cebu

with the CIF value of S 22,512.00, FRT & EXW is $ 21,500.00, OC is $ 600.00
and INS is 2% of FOB. Compute for FOB, EXW and FRT.

Solution:
CIF

EXW FRT+ OC + INS

$ 22,512.00 $21,500.00+$600.00+ 0.02 FOB

$22.512.00 $22.100.00 +0.02 FOB

0.02 FOB S 22,512.00-$22,100.00

0.02 FOB = S 412.00

FOB $ 412.00 0.02

FOB $ 20.600.00

CFR FRTEXWOC

CFR $ 21.500.00+ $ 600.00

CFR $ 22,100.00

INS CIF-CFR

INS $ 22,512.00 $22.100.00

INS $412.00

FOB INS 2%

FOB $ 412.00 0.02

FOB $ 20,000.00

EXW = FOB-OC

EXW = $ 20,600.00-$600.00

EXW = $ 20,000.00

FRT + EXW $ 21,500.00

FRT $ 20,000.00 $ 21,500.00

FRT $ 21,500.00-$20,000.00

FRT $ 1,500.00

FRT CIF(FOB-INS)

FRT $ 22,512.00 (S20,600.00 S 412.00)

FRT $ 22,512.00-$21,012.00
FRT $ 1.500.00

20. An American Company based in Makati City importing 100 sets of laptops
with a CIF value of $ 29,000.00, INS & OC is $ 1,520.00, EXW is 25,000.00
and INS is 4% of FOB, determine the FRT, FOB. INS and OC.

Solution:

CIF (EXW+INS + OC)

FRT

FRT S29,000.00 ($25,000.00+S 1,520.00)

FRT $ 29,000.00 $ 26,520.00

FRT 2,480.00

FOB CIF-FRT INS

FOB $29,000.00 $2,480.00 1.04

FOB $ 26,520.00 1.04

FOB $ 25,500.00

INS FOB x 4%
INS $ 25,500.00 x 0.04

INS $ 1.020.00

INSOC S 1,520.00

S 1,020.00 OC $ 1.520.00

S 1,520.00-S 1,020.00

OC $ 500.00

21. Importation of electrical supplies was assessed by the BOC at Port of

Davao of having a value of S 17,000.00 CIF, after the inspection, the
examiner determine the following information; EXW & INS of $ 15,307.00; OC
of $ 350.00 and INS is 2% of FOB. Compute the FOB and EXW value.

Solution:

FRT

CIF (EXW+INS+OC)

FRT $ 17,000.00 (S 15,307.00+$350.00)

FRT = $ 17,000.00 $ 15.657.00

FRT $ 1,343.00
FOB CIF-FRT 1. INS

FOB $ 17,000.00-$1.343.00 1.02

FOB $ 15.657 1.02

FOB $ 15.350.00

FOB

EXWOC

$ 15.350.00

EXW $350.00

EXW S 15.350.00 $350.00

EXW $ 15.000.00

22. The importation of wooden furniture was arrived with the CIF value of $
11,000.00 inclusive of FOB & INS value of $ 10,400.00, determine the FOB,
EXW and FRT value if the OC is 3% of FOB and INS is 4% of FOB.

Solution:
FOB + INS $ 10,400.00

FOB+0.04 $ 10.400.00

1.04 FOB $ 10,400.00

FOB $10,400.00 1.04

FOB S 10,000.00

OC FOB x 3%

OC = $ 10,000.00 x 0.03

OC $ 300.00

EXW = FOB – OC

EXW = $ 10,000.00 - $ 300.00

EXW = $ 9,700.00

FRT = CIF (FOB + INS)

FRT = $ 11,000.00 - $ 10,400.00

FRT $ 600.00