Compaq Computer Corporation and Subsidiaries - Page 13




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                        Power               Memory           Backplane/               
                       Supplies Processors  Boards Video BoardsOther     Total        
            1991                                                                      
       Unit sales       1,065,966   382,286  30,191    74,090   180,611  1,733,144    
       Compaq Asia PCA$143,474,373$167,151,642$5,570,843$11,632,130$11,919,452$339,748,440   
       shipments ($)                                                                  
            1992                                                                      
       Unit sales       1,293,140   514,154      0     195,751 1,571,896 3,574,941    
       Compaq Asia PCA$94,643,303$187,135,315    $0  $24,260,291$73,486,057$379,524,966   
       shipments ($)                                                                  
          1991-1992                                                                   
       Unit sales       2,359,106   896,440  30,191    269,841 1,752,507 5,308,085    
       Compaq Asia PCA$238,117,676$354,286,957$5,570,843$35,892,421$85,405,509$719,273,406   
       shipments ($)                                                                  
               Compaq U.S. paid what is recognized in the industry as the             
          turnkey price for the PCA's listed above.  In turnkey                       
          transactions, unrelated subcontractors purchase materials and               
          components from suppliers on the Compaq U.S. AVL, paying the same           
          prices as Compaq U.S.  The turnkey price paid by Compaq U.S.                
          compensated unrelated subcontractors for materials, labor, and              
          overhead as well as a profit markup on each.  In contrast, Compaq           
          U.S. purchased other PCA's on a consignment basis.  In                      
          consignment transactions, Compaq U.S. consigned raw materials and           
          components to the subcontractor, and the consignment price paid             
          by Compaq U.S. compensated unrelated subcontractors for their               
          labor and overhead costs plus a profit on the labor and overhead.           
               Because there was stiff competition from unrelated                     
          subcontractors for most PCA's, prices were set at levels allowed            
          by the market.  The prices for Compaq Asia PCA's were set                   






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