definiens: means ( a ) the direct labor costs ( including salary and wages and fringe benefits ) incurred by the applicable Party or itsAffiliates in conducting the applicable activity ; ( b ) the cost of materials used by the applicable Party or its Affiliates ( including feedstock and rawmaterials, intermediates, components and packaging materials, and including shipping and handling costs, freight - in charges and any applicablesales taxes and/or customs duties therefor ) ; ( c ) a reasonable allocation of overhead ( including without limitation indirect labor costs, supplies andmaterials, plant insurance and property taxes ) and facilities and equipment expense ( including rent, utilities, repairs and maintenance costs, equipment rental, and depreciation expense over the expected life of the buildings and equipment ), ( d ) costs for administration and formanagement of material procurement ( including Crude Ingredient procurement, if applicable ) and other manufacturing or other applicableactivities, including quality control and quality assurance ( QA ), performed directly in support of the applicable activity, calculated in accordancewith reasonable cost accounting methods in effect from time to time, consistently applied ; ( e ) if applicable, amounts paid ( net of rebates ordiscounts, if any ) to non - Affiliate contract manufacturers or service providers in connection with their supply of the Crude Ingredient orsubcontracting of the applicable activity ( including shipping costs and any applicable taxes and/or duties therefor ) and ( f ) any royalties payable toa Third Party attributable to the applicable activity ; provided, however, that no cost may be counted more than once in such calculation and, forclarity, the payment of a share of the Profit to the other Party does not constitute a royalty under clause ( f ) of this definition