Landed Cost per unit formula: allocate ocean freight & customs tariffs across SKUs

Choose and document the allocation basis

This simplified example allocates 2,500 of shared freight in proportion to line weight and assumes ad valorem duty on the supplied goods value. Weight is an illustrative allocation choice; actual charges may depend on volume, value, minimums or other drivers.

Customs value is not universally the factory or FOB amount. Determine the applicable valuation basis, origin, classification and duty rules separately before using the model. The example does not look up tariffs or calculate additional taxes, insurance, storage or brokerage.

Under these assumptions, SKU-A costs 14.96 per unit and SKU-B 47.75, for an estimated total of 17,030. This is a landed-cost estimate, not a universal definition of inventory cost or cost of goods sold.

Fully loaded Unit Landed Cost formula (FOB + HTS Duty + Weight-Allocated Freight)

Lock $D$2:$D$3 and $G$2 with absolute references so the formula copies down across every SKU line on the commercial invoice.

Use complete numeric inputs, positive unit counts and supplier unit prices, nonnegative weights/rates/freight and a positive total weight. The fixed two-line denominator must be extended when more SKUs are added.

=IF(OR(B2<=0,C2<=0,SUM($D$2:$D$3)<=0,MIN($D$2:$D$3)<0,E2<0,$G$2<0),"Invalid cost inputs",ROUND(((B2 * C2) * (1 + E2) + $G$2 * (D2 / SUM($D$2:$D$3))) / B2, 2))

Landed multiplier % above factory FOB price

Compares the modeled unit landed cost with the supplier unit cost. It does not establish a selling-price break-even point because selling expenses and other costs are excluded.

=IF(OR(B2<=0,C2<=0,SUM($D$2:$D$3)<=0,MIN($D$2:$D$3)<0,E2<0,$G$2<0),"Invalid cost inputs",ROUND((((B2 * C2) * (1 + E2) + $G$2 * (D2 / SUM($D$2:$D$3))) / B2) / C2 - 1, 4))

Further reading

• Microsoft Support — SUM function
• US CBP — Commercial invoice value