A company imports subassemblies to complete as finished goods. A substantial portion of this product goes to the export market. The organization might best reduce its expenses for the product by:
A company imports subassemblies to complete as finished goods. A substantial portion of this product goes to the export market. The organization might best reduce its expenses for the product by:
Creating a free trade zone (FTZ) is the most effective way for a company that imports subassemblies and exports finished goods to reduce costs. An FTZ allows companies to defer, reduce, or eliminate customs duties on goods that are imported for the purpose of manufacturing, assembling, repairing, or other processing activities. This can result in significant cost savings, especially if a substantial portion of the product is exported, as the duties on the imported subassemblies would not have to be paid until they leave the FTZ. Additionally, goods can be stored in an FTZ without incurring customs duties, allowing for flexibility in inventory management.
option B
C:The company imported only one portion not all the parts so create FTZ not the right answer C is the right answer Using the same broker to handle imports and exports (option C) could indeed help streamline processes and potentially reduce expenses. Using the same broker for both imports and exports can lead to efficiencies in customs clearance procedures, documentation management, and communication. This integrated approach can help minimize errors, expedite the movement of goods, and potentially reduce brokerage fees and administrative costs associated with customs processes.
A Free Trade Zone (FTZ) can be an effective way for a company that imports subassemblies and exports finished goods to reduce costs.