Scenario 20.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating.The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches.BASF plans to market the product directly to businesses that manufacture the casings for these types of products.BASF currently uses a system of salespeople headquartered in Germany,while its primary business customers are in China.
-Refer to Scenario 20.2.If BASF were to price its product in barrels from the factory,before it is loaded on the carrier,this would be an example of ____ pricing.
A)buy-back allowance
B)geographic
C)F.O.B destination
D)F.O.B.factory
E)base-point

Question

Quizplus · Accepted Answer

F.O.B (Free on Board) factory pricing means that the buyer is responsible for transportation costs from the factory, and therefore the price is set at the factory before being loaded onto a carrier. This method of pricing is commonly used for bulk or heavy items like chemicals.

Scenario 20.2 Use the Following to Answer the Questions