Consolidated Manufacturing, Inc., M. P. Long Living Trust, Merl Philip Long, Trustee, Tax Matters Person - Page 13

                                        -13-                                          
          market-related factors, including supply and demand.  The                   
          exchange amount, the core amount, and the total of those two                
          amounts (i.e., the remanufactured automobile part sales price)              
          for each remanufactured automobile part sold by Consolidated were           
          separately stated on each of Consolidated's sales invoices for              
          each such sale (remanufactured automobile part sales invoice).              
               Each automobile parts remanufacturer established its own               
          remanufactured automobile part sales price consisting of an                 
          exchange amount and a core amount.  Consolidated determined the             
          exchange amount that it charged as part of its remanufactured               
          automobile part sales price based on market-related factors.  In            
          making that determination, Consolidated, inter alia, examined the           
          jobber price exchange amounts for remanufactured automobile parts           
          (i.e., the exchange amounts that automobile retail parts stores             
          determined should be part of the total prices charged their                 
          respective customers for remanufactured automobile parts) that              
          were produced by those competitors of Consolidated which were               
          comparable to it in terms of, inter alia, quality of products and           
          service and warranty policy.                                                
               The core amount included as part of the remanufactured                 
          automobile part sales price charged for any given remanufactured            
          automobile part varied among remanufacturers.  Consolidated                 
          determined that core amount based on several market-related                 
          factors, including the supply and demand of customer cores.  One            
          such factor was the location of the customer core within its                




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