definiens: means the Processing cost of each Batch of Product, plus [ * * * * * ] . The Processing cost of each Product shall meanthe sum of Direct Expenses, Indirect Expenses and Overhead Costs actually incurred in, and allocable to, the Processingof such Product . As used herein : means those direct materials ( ) and direct labor ( ) and direct expenses(“Direct Expenses ) involved in the Processing of the Product . Direct Materials will be the standard cost to purchase the rawmaterials including freight cost and all raw material components used in manufacturing the product . Direct labor will includethe four SIGMA - TAU departments that Process the Product : manufacturing, chemistry, microbiology and qualityassurance . SAP routing hours will be established for the standard labor hours to perform each task in the Processing of aBatch . Those standard hours times a costing rate will equate to the total Direct Labor costs . The Direct Labor costing ratewill be based upon salaries and fringe benefits for the personnel directly involved in the Processing the Product . DirectExpenses also includes reasonable out - of - pocket payments to Third Parties for services related to the Processing of suchProduct or components thereof