In the Deductive Value method, what is the basis for calculating the unit price?

• A. It involves sampling at least three domestic firms and using the one that would have sold the aggregate quantity, then deducting all expenses from dock to sale, including profit margins, to determine the unit price.
• B. It uses the total cost of manufacturing, including labor and materials.
• C. It relies on the price actually paid or payable by the importer.
• D. It uses the price of the most favourable supplier.

Answer: (A)

Deductive value determines the unit price from the price at which the goods (or identical or similar goods) are sold in the country of import to unrelated buyers. From that domestic selling price, you subtract the costs incurred after import—such as transport to the sale point, insurance, packing, selling expenses, and a normal profit—to back out the per-unit value.

The described approach matches this: it looks at domestic firm prices to find a price that would have been obtained for the quantity sold, then deducts all post-import costs, including profit margins, to arrive at the unit price. That is exactly how deductive value works.

The other options describe different valuation approaches: using manufacturing cost is the computed value method; relying on the price actually paid or payable is the transaction value; and using the price of the most favourable supplier isn’t a provided valuation method.