definiens: means the actual, direct cost s to manufacture ( including quality control and testing ) and package the Product including, without limitation, the landed cost of r aw materials and packaging materials, component costs, labor ( salary and alloc able benefits ), material adjustments for off - grade or defective material, ha ndling losses, physical adjustments, salvage and reasonable overhead charge s relating to the manufacture of the Product, calculated in accordance with U.S. generally accepted accounting principles, consistently applied . The Manufacturing Cost shall specifically exclude all costs incurred in research, development, design, marketing, promotion and administration and in obtaining the P roduct Approval . If, in the sole discretion of the Manufacturer, all or any por tion of the manufacturing or packaging of the Product is subcontracted to a thir d party ( or to any Affiliate ), the Manufacturing Cost shall include th e actual amount paid, without xxxx - up, to such third party ( or Affiliate ) . Genpha rm hereby preliminarily establishes the Manufacturing Cost at $ * * . * * per 1, 000 extended units in bulk