definiens: or means, to the extent that Product is sourced from XOMA, standard unit cost of manufacture of Product ( i.e., direct m aterial and direct labor costs, plus manufacturing overhead specifically attributable to Product, all calculate d in accordance with generally accepted accounting princ iples, consistently applied ) . Direct material costs means the actual costs incurred in manufacturing or purchasin g materials, including freight - in costs, sales and excise taxes imposed thereon and customs duty and charges levied by government authorities, and all costs of packag ing components . Direct labor costs means the actual cos t of employees engaged in direct manufacturing acti vities and direct or indirect quality control and quality assurance activities who are directly employed in m anufacturing and packaging Product . Overhead attributable to Pro duct will include a reasonable allocation of indire ct labor ( not previously included in direct labor costs ), a reasonable allocation of administrative costs, and a reasonable allocation of facilities costs, all in accordance w ith generally accepted accounting principles, consi stently applied . Overhead will not include corporate admini strative overhead or plant start - up costs or costs associated with excess capacity . All allocations will be based on the assumption that XOMA ’s plant and equipment are utilized to their reasonable full capacity . XOMA sh all prepare a detailed breakdown of the components of Cost of Goods Sold from time to time upon request by the JMC