Incoterms Formulas Quiz

Questions and Answers

Which formula correctly represents the calculation of CIP using FCA?

CIP = FCA + O/C + INS

CIP = FCA + FRT + CPT

CIP = FCA + INS + FRT (correct)

CIP = FCA + O/C + FRT

What does the formula CIP = EXW + O/C + INS + FRT include in its composition?

Costs related to freight insurance and additional costs (correct)

Costs related to liabilities and claims only

Costs related to local delivery only

Costs related to international transport only

Which of the following components is not included in the calculation of CIP as per any of the given formulas?

Other Costs

Insurance

Duty (correct)

Freight

In the relationship CIP = CPT + INS, what does CPT stand for?

Carriage Paid To Signup and view all the answers

Which of the following combinations correctly represents the non-inclusion aspect of CIP calculations?

CIP does not include freight costs Signup and view all the answers

Which formula correctly represents the relationship involving CFR?

CFR = FOB + FRT Signup and view all the answers

What is the correct equation for determining FCA from CPT?

FCA = CPT - FRT Signup and view all the answers

What is the correct formula for calculating DAP/DPU/DDP using FOB?

DAP/DPU/DDP = FOB/FCA + Freight + Destination O/C Signup and view all the answers

In which case is the formula FCA = EXW + O/C applicable?

For calculating costs at the seller's premises Signup and view all the answers

Which Incoterms are applicable for shipments by air or sea?

EXW, FCA, CPT Signup and view all the answers

Which formula would you use to find FCA using CIP?

FCA = CIP - (INS + FRT) Signup and view all the answers

Which of the following formulas shows the relationship between CFR and CIF?

CFR = CIF - INS Signup and view all the answers

For shipments classified strictly as 'SEA ONLY', which terms are NOT applicable?

CPT Signup and view all the answers

How is the DAP/DPU/DDP calculated when using EXW as the starting point?

DAP/DPU/DDP = EXW + Origin O/C + Freight + Destination O/C Signup and view all the answers

In what scenario would you use CFR in the context of DAP/DPU/DDP calculations?

When calculating using freight terms for sea shipments Signup and view all the answers

What is the correct formula for CPT that includes FCA?

CPT = FCA + FRT Signup and view all the answers

Which formula correctly represents CIF in terms of EXW?

CIF = EXW + O/C + INS + FRT Signup and view all the answers

Which of the following formulas defines CIF in relation to FOB?

CIF = FOB + INS + FRT Signup and view all the answers

To find CPT using CIP, which operation is performed?

CPT = CIP - INS Signup and view all the answers

How does CIF relate to CFR in terms of insurance?

CIF = CFR + INS Signup and view all the answers

What is the relationship between XF and FAS according to the provided formulas?

FAS = EXW + O/C Signup and view all the answers

Which formula correctly represents the relationship between FOB and CFR?

FOB = CFR - FRT Signup and view all the answers

What is the equation for EXW in relation to CIF?

EXW = CIF - (INS + FRT) Signup and view all the answers

How is EXW defined in relation to CFR/CPT?

EXW = CFR/CPT - (O/C + FRT) Signup and view all the answers

Which statement about the relationship between EXW and FOB is correct?

FOB = EXW + O/C Signup and view all the answers

Study Notes

INCOTERMS Formulas Overview

CIP (Carriage and Insurance Paid to): Calculated as FCA + Insurance + Freight (INS + FRT) or as EXW + All Costs (O/C) + INS + FRT.
Alternative representation: CIP = CPT + INS.

Key Formulas for FCA (Free Carrier)

FCA (Free Carrier) combines elements of other terms: EXW + Origin Costs (O/C), or deducted from CPT (CPT - FRT).
Additionally, FCA can be derived from CIP by accounting for insurance and freight: FCA = CIP - (INS + FRT).

Key Formulas for CFR (Cost and Freight)

CFR integrates freight costs into the FOB formula: CFR = FOB + FRT.
Alternative calculation: CFR can also be represented as EXW + O/C + FRT or CIF - INS.

Formulas for DAP/DPU/DDP (Delivered At Place/Delivered at Place Unloaded/Delivered Duty Paid)

Calculations for these terms include all costs: DAP/DPU/DDP = EXW + Origin O/C + FRT + Destination O/C.
Another perspective: DAP/DPU/DDP can also be calculated from FOB/FCA plus freight and destination charges or from CFR/CPT plus destination charges.

General Notes on Shipments

Air/Sea shipments utilize terms EXW, FCA, and CPT.
Sea-only shipments focus on terms EXW, FOB, and CFR.

Additional EXW Formulas

EXW can also be expressed through various other terms depending on the context:
- EXW = FOB/FCA - O/C
- EXW = CFR/CPT - (O/C + FRT)
- EXW = CIF/CIP - (O/C + INS + FRT).

Additional References for FAS and FOB

FAS (Free Alongside Ship) and FOB share similarities, both being calculated as EXW + O/C.
For FOB specifically, other formulations are also relevant: FOB = CFR - FRT or FOB = CIF - (INS + FRT).

Forms of CPT (Carriage Paid To)

CPT can be derived either via FCA + FRT or directly from EXW + O/C + FRT.
It can also be expressed in relation to CIP by subtracting insurance: CPT = CIP - INS.

CIF (Cost, Insurance, and Freight)

CIF incorporates costs of freight and insurance as additional elements to FOB: CIF = FOB + INS + FRT.
Other forms: CIF = EXW + O/C + INS + FRT or CIF = CFR + INS.

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Description

Test your knowledge of Incoterms with this quiz focused on understanding the different formulas used, such as CIP, FCA, and CPT. Learn how costs, insurance, and freight terms apply to various shipping scenarios. Perfect for students or professionals involved in international trade.