To calculate unit landed cost for each item in an inbound shipment, follow the steps below:
Step 1: Determine the Total Weight of Each Item
To calculate the total weight of each item, multiply the weight of each item as defined in the item record by the quantity of that item in the inbound shipment.
Total Weight of Item = Weight of Item from Item Record * Quantity of Item
Step 2: Find the Percentage of Each Item
To find the percentage of each item in the inbound shipment, divide the total weight of each item (as calculated in Step 1) by the total weight of all items in the inbound shipment and then multiply by 100.
Percentage of Item = (Total Weight of Item / Total Weight of All Items) * 100
Step 3: Calculate the Percentage of Each Item with a Landed Cost
To calculate the percentage of each item with a landed cost, multiply the percentage of each item (as calculated in Step 2) by the total landed cost of the inbound shipment.
Percentage of Item with Landed Cost = Percentage of Item * Total Landed Cost
Step 4: Determine the Unit Landed Cost of Each Item
To calculate the unit landed cost of each item, divide the percentage of each item with a landed cost (as calculated in Step 3) by the quantity of that item in the inbound shipment.
Unit Landed Cost of Item = Percentage of Item with Landed Cost / Quantity of Item
Note that these formulas are based on the weight allocation method, and may vary based on exchange rate/currency or the chosen landed cost method.
Example:
Suppose you have an inbound shipment of 100 units of Item A, with a weight of 1 lb per unit, and 50 units of Item B, with a weight of 2 lbs per unit. The total landed cost for the shipment is $5,000.
Step 1: Determine the Total Weight of Each Item
Total weight of Item A = 1 lb * 100 units = 100 lbs Total weight of Item B = 2 lbs * 50 units = 100 lbs
Step 2: Find the Percentage of Each Item
Total weight of all items = Total weight of Item A + Total weight of Item B = 100 lbs + 100 lbs = 200 lbs
Percentage of Item A = (Total weight of Item A / Total weight of all items) * 100 = (100 lbs / 200 lbs) * 100 = 50% Percentage of Item B = (Total weight of Item B / Total weight of all items) * 100 = (100 lbs / 200 lbs) * 100 = 50%
Step 3: Calculate the Percentage of Each Item with a Landed Cost
Total landed cost of the inbound shipment = $5,000
Percentage of Item A with Landed Cost = Percentage of Item A * Total Landed Cost = 50% * $5,000 = $2,500 Percentage of Item B with Landed Cost = Percentage of Item B * Total Landed Cost = 50% * $5,000 = $2,500
Step 4: Determine the Unit Landed Cost of Each Item
Quantity of Item A = 100 units Quantity of Item B = 50 units
Unit Landed Cost of Item A = Percentage of Item A with Landed Cost / Quantity of Item A = $2,500 / 100 units = $25 per unit
Unit Landed Cost of Item B = Percentage of Item B with Landed Cost / Quantity of Item B = $2,500 / 50 units = $50 per unit