Brewer Quality Homes, Inc. - Page 18

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          particularly helpful, we do use some of the data and analyses               
          they provide in reaching our decision.                                      
               We first consider the Robert Morris Associates (hereinafter            
          sometimes referred to as RMA) report for the industry on                    
          financial ratios, which provides data on, among other things,               
          executive compensation as a percentage of sales for companies               
          comparable to petitioner.  Based on petitioner’s and the mobile             
          home retail industry’s financial performances in 1995 and 1996,             
          we conclude that Jack’s compensation as a percentage of sales               
          should be compared to those of executives in comparable companies           
          at around the 90th percentile.  By multiplying petitioner’s sales           
          by the appropriate RMA factor for each year, we determine that              
          payments to Jack, as compensation for the services he performed             
          for petitioner, would have been about $520,000 in 1995 and                  
          $600,000 in 1996.  We add $5,000 to the 1995 amount on account of           
          Jack’s guaranty of a bank loan to petitioner.                               
               We also consider the fact that petitioner did not provide              
          Jack with retirement benefits.  Based on comments by respondent’s           
          expert, we conclude that an amount of about 5 percent of Jack’s             
          compensation would be sufficient to compensate him for the                  
          absence of retirement benefits.  This brings reasonable                     
          compensation to about $550,000 in 1995 and $630,000 in 1996.                









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