Using Landed Cost - BigIdeas Pty Ltd example

Landed cost module includes the ancillary costs of shipping and handling in the cost of inventory entered into Jiwa.  

Cost which are apportioned to the inventory items (under AASB 102 - Inventories) may include:

• Taxes and duties levied on the imported goods which are not recoverable 

  (GST refunded by the ATO for example may not be included in the cost of inventories but cab still entered on the shipment as a GST Credit)

• Freight costs
• Handling costs
• Customs agent fees
• Certain Storage costs
• Quarantine fees
• Insurance

Note:  Discounts and rebates should be deducted from the purchase cost of inventories recorded in Jiwa.

Background of example

• BigIdeas Pty Ltd is an Australian company selling imported goods purchased from China

• Purchases from Chinese suppliers are contracted in $USD

• There are 2 suppliers Woo Sun & Woo Dragon

• An identical set of products is purchased from each supplier - jeans, tshirts and shoes

• A shipping agent Golden Sun Shipping (with Australian Business) packs all Chinese orders into a container and ships every month to Australia (Amounts are invoice in $AUD)

• Each order delivered is assessed for GST

• Freight, Insurance, storage and quarantine fees are payable on each shipment and are apportioned on a cost basis to stock

• FX Rates are:
  
  

  Month	USD Rate
  September	0.812
  October	0.784
  November	0.756