Affiliated Foods, Inc., A Corporation - Page 10




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          money in currency or check or if the member store elects an off-            
          invoice credit.3                                                            




               3  The following table is based on a table prepared by                 
          Tammie Coffee, petitioner’s chief financial officer, to                     
          illustrate the point in the text.                                           
          Consolidated Foods, Inc.                                                    
          Comparison of gross profit on AFI’s ledger of off-invoice/at-show           
          payment:                                                                    
          Item #27024                                                                 
                                                  Off invoice    At show              
          Sale to AFI customer:                                                       
          List price                                   $76.20    $76.20               
          Less: usual discount                          1.20         1.20             
          Subtotal: Price before markup                75.00     75.00                
          Add Markup:  7.5%                             5.25         5.25             
          Subtotal                                     80.25     80.25                
          Less: Off-invoice show money discount         .75          n/a              
          Total amount billed to member store           79.50        80.25            
          AFI purchase price from vendor:                                             
          List cost                                    76.20     76.20                
          Less:                                                                       
          Usual discount                               1.20      1.20                 
          Off-invoice show money discount               .75          n/a              
          Total cost of goods sold                      74.25        75.00            
          Gross profit on AFI general                                                 
          ledger (margin):                                                            
          Amount billed to member store                79.50         180.25           
          Less: cost of goods sold                      74.25        75.00            
          Total margin                                  5.25         5.25             
               1  We note that, if it is assumed that the member store                
          receives a payment of $0.75 at the food show, it would have to              
          subtract that receipt ($0.75) from the amount it pays petitioner            
          ($80.25) to determine its cost for the goods it purchased                   
          ($79.50).                                                                   






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Last modified: November 10, 2007