we purchase copiers from one of the webster,new york,factories, part of the office documents products division. normally, the transfer is made on a full standard cost basis, which includes a small percentage for administration. if we need to respond to a competitive pricing threat, we are unable to renegotiate. the manufacturing unit cannot sell below cost as they are structured to, at a minimum, cover their costs. in this case. in this case,the respective unit controllers would discuss possibilities of cost savings and the volume implications if pricing erodes unit sales. the corporate controller would steps in, as appropriate, to help facilitate a solution. the aggressive business targets and the fierce competition made for some very heated and hard meetings. we were both under same legal entity with the effects of transfer pricing balanced at consolidation. the primary concern was the influence of transfer of transfer pricing on achieving unit performance targets.