Payment of Duty and Duty-Related Carrying Cost Liston, Inc., owns a factory located...
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Accounting
Payment of Duty and DutyRelated Carrying Cost
Liston, Inc., owns a factory located close to but not inside, a foreign trade zone. The plant imports volatile chemicals that are used in the manufacture of chemical reagents for laboratories. Each year, Liston imports about $ of chemicals subject to a tariff when shipped into the United States. About of the imported chemicals are lost through evaporation during the manufacturing process. In addition, Liston has a carrying cost of per year associated with the duty payment. On average, the chemicals are held in inventory for months.
Assume that Liston is considering building a new plant inside a foreign trade zone to replace its chemical manufacturing plant.
Required:
How much duty will be paid per year by the factory located inside the foreign trade zone?
fill in the blank of $
How much in duty and dutyrelated carrying costs will be saved by relocating inside the foreign trade zone?
fill in the blank of $
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