Garmin 2009 Annual Report Download - page 94

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ShippingandHandlingCosts
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Shippingandhandlingcostsareincludedincostofgoodssoldintheaccompanyingconsolidatedfinancial
statements.
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ProductWarranty
TheCompanyprovidesforestimatedwarrantycostsatthetimeofsale.Thewarrantyperiodisgenerally
foroneyearfromdateofshipmentwiththeexceptionofcertainaviationproductsforwhichthewarrantyperiod
istwoyearsfromthedateofinstallationandcertainmarineproductsforwhichthewarrantyperiodisthreeyears
fromthedateofshipment.
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SalesPrograms
TheCompanyprovidescertainmonthlyandquarterlyincentivesforitsdealersanddistributorsbasedon
variousfactorsincludingdealerpurchasingvolumeandgrowth.Additionally,fromtimetotime,theCompany
providesrebatestoendusersoncertainproducts.Estimatedrebatesandincentivespayabletodealersand
distributorsareregularlyreviewedandrecordedasaccruedexpensesonamonthlybasis.Inaddition,the
Companyprovidesdealersanddistributorswithproductdiscountstermed“priceprotection”toassistthese
customersinclearingolderproductsfromtheirinventoriesinadvanceofnewproductreleases.Eachprice
protectiondiscountistiedtoaspecificproductandcanbeappliedtoallcustomerswhohavepurchasedtheprice
protectedproductoraspecialpriceprotectiondiscountmaybeagreedtoonanindividualcustomerbasis.These
rebates,incentives,andpriceprotectionsarerecordedasreductionstonetsalesintheaccompanying
consolidatedstatementsofincomeintheperiodtheCompanyhassoldtheproduct.
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AdvertisingCosts
TheCompanyexpensesadvertisingcostsasincurred.Advertisingexpenseamountedtoapproximately
$155,521,$208,177,and$206,948fortheyearsendedDecember26,2009,December27,2008,andDecember
29,2007,respectively.
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ResearchandDevelopment
AmajorityoftheCompany’sresearchanddevelopmentisperformedintheUnitedStates.Researchand
developmentcosts,whichareexpensedasincurred,amountedtoapproximately$238,378,$206,109,and
$159,406fortheyearsendedDecember26,2009,December27,2008,andDecember29,2007,respectively.
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CustomerServiceandTechnicalSupport
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Customerserviceandtechnicalsupportcostsareincludedontheselling,generalandadministrative
expenselineonourstatementsofoperations.Customerserviceandtechnicalsupportcostsincludecosts
associatedwithperformingorderprocessing,answeringcustomerinquiriesbytelephoneandthroughWebsites,
e‐mailandotherelectronicmeans,andprovidingfreetechnicalsupportassistancetocustomers.Thetechnical
supportisprovidedwithinoneyearaftertheassociatedrevenueisrecognized.Therelatedcostofprovidingthis
freesupportisnotmaterial.
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