Fully Loaded COGS definition
Fully Loaded COGS means, with respect to any Product supplied by or on behalf of Company to Distributor hereunder, the actual, fully-burdened cost to manufacture such Product, which means the actual unit costs of manufacture, which shall consist of direct material costs, direct labor costs, and manufacturing overhead attributable to such Product manufacturing activities, all calculated in accordance with GAAP. Direct material costs shall consist of the costs incurred in purchasing materials. Direct labor costs shall consist of the cost of: (a) employees working in manufacturing and packaging of the Product and employees working in facility maintenance; (b) the acquisition of third party manufacturing services; and (c) a fair and reasonable allocation of direct or indirect quality control and quality assurance activities and supply chain management, and including, in either case, any other costs required by GAAP. Manufacturing overhead specifically attributable to such Product shall include a reasonable allocation of administrative costs and a reasonable allocation of costs of equipment, utilities and manufacturing and distribution facilities used to manufacture the Product for Commercialization by Distributor. For clarity, Fully Loaded COGS shall exclude any costs associated with Company’s provision of Commercial Support to Distributor hereunder in compliance with the Commercial Support Requirements as set forth in Clause 6.4, which shall be covered by the Upfront Payment under Clause 4.1;
Examples of Fully Loaded COGS in a sentence
For the avoidance of doubt, Distributor’s payment of the Upfront Payment shall be excluded from the calculation of Fully Loaded COGS and will be solely for sales and marketing purposes.