[Victoria_R]

"Take a Barbie doll for example. China exports them for $2 each. But in the US, they are sold for $9.99 each. The Chinese company making it spends 65 cents on importing materials, $1 on transportation and management, and gets to keep 35 cents, including labor costs. But rules of origin make it seem that China gets $2 each for Barbie dolls."

This is how evil auditors think:
 
REVENUE: Gross Sales Price in US:                 $9.99
 
LESS: Cost of Chinese Manufacture:
        Materials                            .65
        Freight Out & Management            1.00
        Labour & subcontractor profit        .35
        TOTAL                                     (2.00)
 
NET REVENUE to US company                   $7.99

In addition to the $2.00 paid to the Chinese company, the US company would incur costs in distribution, marketing, management, design, etc., in the US, but the numbers and information via China still seem out of line, especially the part regarding materials.

Isn't plastic manufactured from oil? When did the US start exporting oil? Isn't the US textile manufacturing industry pretty much non-existent?

Sorry, Obama & Communist friends. The numbers are so out of whack to be along the lines of the most unbelievable propaganda. (Some of us actually learned statistics and math in school.)

[dila813]

One note,Barbie dolls have to change every 6 months to keep sales up. Because of China long lead times and the short period of time the can be sold at the max price, they are missing a very large cost component in this example. This cost is more than eqaul to the example cost.

[hinckley buzzard]

Just for the record, a small percentage of Alaskan North Slope oil was exported to Asia from 1996 to 2000. Congress monkeyed with the laws to start and then stop this practice after a short period.