Manufacturing Cost

Example Definitions of "Manufacturing Cost"
Manufacturing Cost. With respect to a finished Unit, Manufacturer's reasonable, documented, out-of-pocket costs to supply applicable Unit components, related inputs, and services (a) supplied by an unaffiliated third party or (b) manufactured directly by Manufacturer or its Affiliates; it being understood and agreed that (i) in the case of costs referred to in clause (a) of this sentence where an unaffiliated third party is the manufacturer, Manufacturing Costs will equal one hundred percent (100%) of the amounts... invoiced by (1) such unaffiliated third party and (2) any other unaffiliated third party engaged by Manufacturer or its Affiliates to provide product quality assurance/control services (e.g., release testing, stability testing) with respect to the applicable Unit or shipping of such components to the applicable assembly facility, and (ii) in the case of costs referred to in clause (b) of this sentence where Manufacturer or its Affiliates is the manufacturer, Manufacturing Costs will equal the Manufacturer's reasonable, documented, out-of-pocket costs of manufacturing the applicable Unit, which manufacturing costs: (x) will include the cost of raw materials actually purchased by Manufacturer or its Affiliates, direct and identifiable labor, product quality assurance/control costs and other direct and identifiable variable costs and appropriate direct and identifiable costs (or appropriate allocation thereof) for equipment pools, plant operations, yield losses (to the extent consistent with industry practice) and plant support services (including utilities, maintenance, engineering, safety, human resources, finance, plant management and other similar activities), and (y) will be calculated in accordance with GAAP and the Manufacturer's policies and procedures for its other products, in each case consistently applied (and such plant operations and support services costs will be allocated consistent with GAAP), and (z) notwithstanding anything to the contrary, will exclude all costs which cannot be linked to a specific manufacturing activity such as charges for corporate overhead View More
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