Common use of Variance Costs Clause in Contracts

Variance Costs. Standard Cost of Goods include cost elements which are set at so-called standard costs. They serve as a norm on how much typically a Product costs. Deviations from such standard costs are captured in variances · Inventory re/devaluation shall mean the gain or loss as a result of the inventory value adjustment due to changes in the standard costs. · Non-Product related Production costs shall contain technical operations corporate headquarter overhead costs, non Product allocated QA costs, validation costs, directly expensed IT Programme costs, and other costs that cannot be attributed to specific Products. · Warehousing & distribution costs are costs related to warehousing and distribution activities for finished goods to be shipped to 3rd parties. · Write-offs are captured for the destruction of Products that cannot be used anymore due to expiration of shelf-life, spoilage in the Production process, and transportation mishaps. · Third Party royalties are manufacturing and/or supply royalties paid to Third Parties The following expenses are not included in Production costs: