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minor physical differences. The difference in price relating to
the minor differences in physical properties can be quantified
with definite and reasonably ascertainable adjustments. See sec.
1.482-2A(e)(2)(ii), Example (3), Income Tax Regs. ("Since minor
physical differences in the product generally have a definite and
reasonably ascertainable effect on prices, such differences do
not normally render the uncontrolled sales noncomparable to the
controlled sales.").
The record demonstrates that the only differences in PCA's
within each product category were the particular components used
on each individual PCA and the time required to process PCA's on
the manufacturing line. We are persuaded that these differences
can be corrected with adjustments to Compaq U.S. standard costs.
The Compaq U.S. standard cost of labor and overhead is equal to
the time required to process a given PCA multiplied by the Compaq
U.S. hourly labor and overhead rate. The Compaq U.S. standard
material cost for a given PCA is the sum of the unburdened
purchase order prices for each and every component used on the
PCA as set forth in the bill of materials. Thus, according to
petitioner, the Compaq U.S. standard costs account for
differences in the time required to process a PCA and in the cost
of the materials on the PCA.
Based on the uncontrolled purchases of 3.6 million PCA's,
the turnkey equivalent price of PCA's purchased from unrelated
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