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This excerpt taken from the VLG 10-K filed Sep 28, 2006. Shipping
and Handling Fees and Distribution Costs
The Company recognizes delivery and freight charges to customers
as elements of net sales. Costs of third-party freight are
recognized as cost of products sold. The majority of the costs
associated with the distribution of the Company’s products,
which include direct labor and overhead associated with filling,
warehousing and delivery by Company vehicles, is reflected in
operating, distribution and administrative expenses and amounted
to $26,736,000, $20,987,000 and $20,581,000 for the fiscal years
ended June 30, 2006, 2005 and 2004, respectively. The
Company conducts multiple operations out of the same facilities
and does not allocate facility-related expenses to each
operational function. Accordingly, there is no facility-related
expense in the distribution costs disclosed above. Depreciation
expense associated with the Company’s delivery fleet
amounted to $1,893,000, $1,491,000 and $1,179,000 for the fiscal
years ended June 30, 2006, 2005 and 2004, respectively, and
is included in depreciation expense.
Third party freight costs relating to the delivery of products
to customers totaled $652,000, $570,000 and $716,000 for the
years ended June 30, 2006, 2005 and 2004, respectively, and
were classified as operating, distribution and administrative
expenses.
The Company has classified cost of deliveries by its employees
and vehicles as operating, distribution and administrative
expenses which amounted to $19,749,000, $15,396,000 and
$14,916,000 for the years ended June 30, 2006, 2005 and
2004, respectively.
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