Which of the Following Is a Way That a Company

question 51

Multiple Choice

Which of the following is a way that a company can lower costs by shipping unassembled goods to an FTZ in an importing country?

• A) Have components manufactured in several countries and ship directly to distributor for assembly to lower manufacturing costs.
• B) Reduce total shipment quantity count by reassembling goods onboard ocean vessel to reduce ocean transportation rates.
• C) Declare components as obsolete inventory with no market value to lower import duties.
• D) Tariffs may be lower because duties are typically assessed at a lower rate for unassembled versus assembled goods.
• E) Ship smaller components by air carrier and larger components by ocean freight to reduce overall transportation costs.

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Definitions:

Total Revenues

The total receipts from sales of goods or services provided by a company before any expenses are subtracted.

Market Consumer Surplus

The discrepancy between the amount customers are prepared to pay for a product or service and the amount they end up paying.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive.

Production Costs

The total amount spent by a business to produce goods or services, including materials, labor, and overhead expenses.