multiplied by 100 to convert to a percentage. Current revenues are net sales of the product for the reporting period (average unit price times quantity sold). Base price revenues are the revenues that would have been derived during the reporting period if all prices had been at base price (i.e. base price times quantity sold during the reporting period).

Although the calculation of the weighted average percentage price adjustment requires determination of price changes at the item level, it may not be feasible to compute and record the percentage price changes at this level of detail. In such cases, it may be permissible to use a sampling, averaging, exceptions, or other valid technique to calculate a weighted average percentage price adjustment. Where these techniques are used, the entity must adhere to accepted standards with regard to materiality, sampling validity, and consistency. In all cases, the entity must maintain documentation which outlines the type of techniques used in calculating the weighted average percentage price adjustment.

The entity must weight its price changes according to one of the following methods:

(1) The quantity sold during the reporting period (as shown in the formula and illustration below);

(2) The quantity sold during the base price period providing the entity can demonstrate that there is no material difference in product mix between the base price period and the reporting period;

(3) The value of the sales to which a price change

(1)

applies as a proportion of the total sales for which the weighted average is computed.

All methods of weighting must take into account price increases and decreases from base price.

The weighted average price adjustment above (below) base price can be computed using the following formula: (Current revenues)-(Base price revenues) x 100 = Weighted (Base price revenues) average percentage price adjustment

ILLUSTRATION OF COMPUTING THE WEIGHTED AVERAGE PERCENTAGE PRICE ADJUSTMENT

The steps for computing the weighted average percentage price adjustment using weighting by quantity sold during the reporting period (method (1) above) are:

1. Multiply the quantity of each item sold during the reporting period by its base price. The result is the base price revenues for each item.

2. Total the base price revenues (Column 5) for the individual items to arrive at the total base price revenues (sum of Column 5).

3. Divide the total base price revenues computed in step (2) above into the difference between total current revenues (sum of column 6) and total base price revenues and multiply the result by 100 to convert to a percentage.

ABCO

E

Total

Item

Base price

Quantity sold during reporting period (000's)

Current

revenues

(000's)

Specific Instructions

Item 22. Enter the name of the parent or unconsolidated entity as shown in Part I, Item 3(a), Form CLC-22. Item 23. If CLC-22 is used to prenotify price increases, enter the dates of the first day and last day of the current cost period for prenotification purposes as defined in 6 CFR, Part 150, Subpart G.

If CLC-22 is used as a quarterly report enter the begin. ning and ending dates of the fiscal quarter to which the CLC-22 applies.

Item 24. Lines (1) through (33) are provided for the prenotification and the reporting of price and cost information. An entity subject to prenotification may not

charge a price on any item in a product line above the higher of the adjusted freeze price or the base price as defined above without prenotifying such an increase to the IRS pursuant to 6 CFR, Part 150, Subpart H, even though the weighted average percentage price adjustment with respect to all base prices within the product line is zero or less.

Col (a) For reporting purposes, list all product lines on lines (1)-(33), accounting for all entity sales except the sales applicable to Items 27-39. For prenotification purposes, list the product lines in which a prenotified price increase will be made. Price adjustments and supporting cost justification must be recorded for each product line categorized

by a 4-digit Standard Industrial Classification (SIC) Code if that is the entity's customary pricing unit (e.g., cost or profit center) for that product line. If a customary pricing unit includes more than one 4-digit SIC code, such pricing unit may be used and a listing of 4-digit SIC codes included within that pricing unit must be attached to the form. The listing of SIC codes must be in decreasing order of sales within the pricing unit. If the customary pricing unit is at a level of aggregation which is less than one 4-digit SIC code, the entity may record price adjustments and supporting cost justification at that level. A customary pricing unit is that unit which has been historically and continually applied.

Col (b)-Enter the applicable 4-digit SIC code for each product line listed in Column (a).

Col (c) All entries in this column must be net of intercompany sales. For prenotification purposes, enter annual sales or revenues at present prices projected for the twelve months following the last day of the current cost period (entered in Item 23) for the product line listed in Column (a). If Part VI is being used for reporting purposes, enter the applicable sales for each product line for the reporting period.

Cól (d)-For prenotification purposes, enter the weighted average percentage price adjustment requested by the entity. The prenotified percentage price increase for the product line may not be charged until 30 days after the Form CLC-22 used for prenotification has been filed with the IRS. For any subsequent Form CLC-22 submitted as a report, the last prenotified percentage must not be exceeded for that product line by the percentage in Column (e), Item 24, Part VI, Form CLC-22. For reporting purposes, leave this column blank.

Col (e)-For reporting purposes, enter the weighted average percentage price adjustment above (below) base price for the reporting period. An entity which submits a Form CLC-22 as a prenotification document during a reporting period in accordance with 6 CFR, Part 150, Subpart H may not exceed the prenotified price adjustment during that reporting period or any subsequent period (see instructions to Column (d) above). Accordingly, any entry in Column (e), Part VI, Form CLC-22 used as a report, which is greater than the latest entry in Column (d), Part VI, Form CLC-22 used as a prenotification document during or prior to the reporting period must be accompanied by an explanation as to why the entity does not appear to be complying with the prices rules in 6 CFR, Part 150, Subpart E. For prenotification purposes, leave this column blank.

Col (f) For those product lines with amounts in Column (d) (prenotifying) or (e) (reporting) that are greater than zero, enter the percentage cost justification from Schedule C, Line 12 unless the entity has not charged a price for an item in the product line above the adjusted freeze price. Schedule C must be attached for each amount entered in this

Column where the entity has charged a price in excess of the adjusted freeze price or the base price, whichever is higher and the weighted average percentage price adjustment entered in Column (e) is greater than zero. If the percentage cost justification in this column is less than the percentage entered in Column (e) Part VI), the entity must furnish documentation explaining why the price increase exceeds the cost justification. For example, if the price of a product has been increased in accordance with a historical seasonal fluctuation (6 CFR 150.203) and the price (Col. e) exceeds cost justification (Col. f) the entity must demonstrate its qualification for the seasonality provision on an attached document.

If prices have been increased pursuant to volatile pricing authority granted the entity, a copy of the order granting the authority and a supporting schedule must be attached to the Form CLC-22 displaying the cost of the volatile material and corresponding price of product during the reporting period. If the entity increased prices only in response to increases in volatile materials, such supporting documentation may be in lieu of the entry in this column and the supporting Schedule C for the product line in Column (a).

Col (g) For prenotification purposes, enter the highest percentage price increase which will be made for any item in the product line. For reporting purposes, enter the highest percentage price increase over base price which was made for any item in the product line during the reporting period. The maximum price which may be charged for any one item in that line may not exceed 110% of the base price or 110% of the adjusted freeze price of that item (whichever is greater) plus the amount which results from multiplying the base price or the adjusted freeze price of that item (whichever is greater) by the percentage of cost justification determined in accordance with this part with respect to that product line or service line.

Examples of Calculation of Item
Maximum Price Limitation

If the entry in this column exceeds the maximum price increase limitation as described in 6 CFR, Part 150, Subpart E, the entity must attach an explanation as to why it has exceeded the maximum price limitation.

Item 25. Enter total sales reflected on attached continuation schedules. Use additional copies of Part VI, Form CLC-22 for any continuation schedule.

Item 26. Enter the total for Item 24, Lines (1)–(33) and Item 25.

NOTE: Items 27 through 39 need not be completed for prenotification purposes.

Item 27. New Items-Enter sales or revenues for the reporting period of all new items whose price has not been increased above a price determined in accordance with 6 CFR, Part 150, Subpart F. An entity which has projected sales and revenues for its current fiscal year of $10 million or more derived from the sale or lease of new items must attach documentation demonstrating that with respect to each new item with projected annual sales of $1 million or more which is offered for sale or lease for the first time during the quarter concerned, that the item qualified as a new item as defined in 6 CFR 150.103 and that the base price of that item has been determined in accordance with that section. For each such item, the entity must include the following information:

1. Name and description of item (attach sufficient documentation so that a comparison with the most nearly similar item can be made).

2. Base price of item.

3. Expected sales or revenues for 12 months following the last day of the reporting period.

4. Date first offered.

5. Method used to determine base price (Average Price, Net Operating Profit Markup, Customary Initial Percentage Markup, or Customary Practice).

6. Documentation supporting the determination of base price.

7. Description of new market, if applicable.

8. Cost of improving or restoring an item for lease and amount of 3 month's rent, if applicable.

9. Estimated sales and revenues from sales and leases of all new items for the current fiscal year

including sales and revenues before August 12, 1973.

Item 28. Enter sales or revenues for the reporting period for wholesaling and retailing activities reported on Schedule T, Form CLC-22.

Item 29. Enter sales or revenues for the reporting period form operations of a public utility as defined in 6 CFR, Part 150, Subpart B.

Item 30. Enter sales or revenues for the reporting period from providers of health services subject to 6 CFR, Part 130, Subpart G.

Item 31. Enter sales or revenues for the reporting period from all insurance operations covered by 6 CFR, Subpart M.

Item 32. Enter sales or revenues for the reporting period from construction operations as defined in 6 CFR, Part 150, Subpart N.

Item 33. Enter sales or revenues for the reporting period from the sales of agricultural products exempt in 6 CFR, Part 150, Subpart D.

Item 34. Enter sales or revenues for the reporting period of foreign operations. To determine sales or revenues of foreign operations, refer to the foreign operations exclusion in the definition of "annual sales or revenues" in 6 CFR, Part 150, Subpart B.

Item 35. Enter the amount of export sales for the report. ing period.

Item 36. Enter sales or revenues of custom products for the reporting period as defined in 6 CFR, Part 150, Subpart F.

Item 37. Enter sales or revenues for the reporting period of lumber and related products defined in 6 CFR, Part 150, Subpart D.

Item 38. Enter sales or revenues for the reporting period of all other products or services exempted in 6 CFR, Part 150, Subpart D.

Item 39. Total Column (c) Items 26 through 39. This total should be reconciled to the sales or revenues for the reporting period.