definiens: means the cost of Product for the Territory shipped in either bulk or final therapeutic form, as the Parti es may then agree . The costs of manufacturing shall be calculated in accordance with reasonable cost accou nting methods, consistently applied, of the Party p erforming the work, and shall consist of the following compon ents : ( a ) direct costs, including manufacturing lab or and materials directly used in manufacturing Products b y CRXX or its Affiliates and allocated supervisory costs of the manufacturing department ; ( b ) direct labor and allocated supervisory costs of non - manufacturing departments ( such as quality and regulatory ) attrib utable to such Products ; ( c ) an allocation of depre ciation of facilities, machinery and equipment used in manufac ture of Products, provided that any idle capacity i n the facility where the Compounds or Products are manufa ctured shall not be allocated to be included in the calculation of Costs of Goods Sold hereunder ; ( d ) t oll process and other charges incurred by CRXX or i ts Affiliates for outsourcing the manufacture of the P roducts and the cost of supervising and managing th e Third Party manufacturers, and of receipt, incoming inspe ctions, storage, packaging, handling quality contro l testing and release of the outsourced items ; and ( e ) any ot her reasonable and customary out - of - pocket costs bo rne by such Party or its Affiliates for the testing, trans port, customs clearance, duty