0538452803_269406 - fruit sales were below the cost of...

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BLTC-9e Sample Answer for End-of-Chapter Hypothetical Question with Sample Answer Chapter 27: International Law in a Global Economy 27–2 Hypothetical Question with Sample Answer The U.S. pineapple industry alleged that producers of canned pineapple from the Philippines were selling their canned pineapple in the United States for less than its fair market value (dumping). The Philippine producers also exported other products, such as pineapple juice and juice concentrate, which used separate parts of the same fresh pineapple, so they shared raw material costs, according to the producers’ own financial records. To determine fair value and antidumping duties, the plaintiffs argued that a court should calculate the Philippine producers’ cost of production and allocate a portion of the shared fruit costs to the canned fruit. The result of this allocation showed that more than 90 percent of the canned
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Unformatted text preview: fruit sales were below the cost of production. Is this a reasonable approach to determining the production costs and fair market value of canned pineapple in the United States? Why or why not? Sample Answer: Yes, it is a reasonable approach to rely on the producers’ financial records, which are reasonably reflective of their costs because their normal allocation methodologies were used for a number of years. These records are historically relied on to present important financial information to shareholders, lenders, tax authorities, auditors, and other third parties. Provided that the producers’ records and books comply with generally accepted accounting principles and were verified by independent auditors, it is reasonable to use them to determine the production costs and fair market value of canned pineapple in the United States....
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This note was uploaded on 11/21/2011 for the course MGMT 4324 taught by Professor Tim during the Spring '11 term at Andhra University.

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