Which statement describes Computed Value in WTO valuation?

Which statement describes Computed Value in WTO valuation?

• A. It is based on the total cost of manufacturing, including man hours, rent, electricity, etc.
• B. It is based on the price actually paid or payable by the importer.
• C. It is based on the price of identical goods in the domestic market.
• D. It is based on the freight value alone.

Answer: (A)

Computed Value uses the cost of producing the goods in the exporting country as the basis for the customs value. This means adding up all manufacturing costs—direct materials and labor, plus the factory overheads like rent, utilities, depreciation, and other production expenses—and including a reasonable profit for the producer. In practice, this method reflects what it costs to make the goods, not what was paid by the importer, nor the price of identical goods in a domestic market, nor simply the freight charges. So describing computed value as based on the total cost of manufacturing, including man hours, rent, electricity, etc., captures exactly how this valuation method works. The other approaches rely on different data: transaction value uses the price actually paid or payable, identical goods use the price of matching goods in the domestic market, and freight value alone does not account for production costs.