Unit of Measure calculation/ coversion

Hi,

For this example I will use the Product Manganese (Mn) which we sell.

 

Negotiation Phase

 

We negotiate with the customer regarding the quantity, price and quality of the Mn. The quality of the product refers to the percentage of Mn% we can provide the customer with. When an agreement is reached a contract is established which reflect the following detail:

 

Unit of Measure               -              MT (Metric Tons)

Quantity                              -              11,000

Mn content (quality)      -              38%

Price                                      -              $4.60 per metric ton unit (MTU)

 

This means the quoted price of this order is (11,000x(38%x4.6)) = $1,922,800.00

 

Note: The reason we show a price in a different “Unit of Measure”, MTU, is because we will use it as part of our calculation on the pro-forma invoice.