Part A: Calculation Question (12.5 marks) A food processing company in Melbourne imports rice in bags from Vietnam to do labelling then resell to its domestic customers. The agreed Incoterm is CFR Melbourne (Incoterms 2020) and the quoted price is USD 1650/ton (called the L/C value). The company wishes to import 100 tons. The product will be shipped in containers with each container holding 20 tons. The Australian Customs impose the import tariff of 20% of the L/C value which the company needs to pay. Other additional costs that the distributor needs to take into account are as follows: Transporting from Melbourne Port to the companys warehouse in Dandenong: AUD 500 per truck (each truck can carry 20 tons of cargo). The current exchange rate is: 1 USD = 1.39 AUD. The estimated insurance cost for this shipment is 1% of the L/C value.

Question 1: Help the company to calculate the break-even price (the base price that the distributor can use to sell the goods to the retailer) per ton in USD, assuming that 1% of the shipments volume is lost in handling. (6.25 Pts)