definiens: with respect to units of a Product shall mean ( a ) the variable costs and fixedcosts incurred by a Party associated with the manufacture ( inclusive of finishing processes including filling, packaging, labeling and/or other preparation ) quality assurance, quality control and other testing, storage and shippingof batches of such units of such Product or ( b ) if such units or components of a Product are not manufactured by theParties, the amounts paid to the vendor plus costs associated with acquisition from such vendor plus the othervariable costs and fixed costs incurred by a Party associated with any finishing processes conducted by such Party, including filling, packaging, labeling and QA / QC testing . For purposes of this definition, means thecost of labor ( calculated on a full - time equivalent basis ), raw materials, scrap, obsolescence, supplies and otherresources directly consumed in the manufacture, quality assurance, quality control and other testing, storage andshipping of batches of such Product, and means the cost of facilities, utilities, insurance ( including anyproduct liability insurance or accrual for self - insurance ), facility and equipment depreciation and other fixed costsdirectly related to the manufacture, quality assurance, quality control and other testing, storage and shipping ofbatches of such Product, as well as amounts paid to Third Parties under a Third Party agreement ( subject to Section11.3 below ), as a result of the manufacture, use or sale of such units of Products . Fixed costs shall be allocated tosuch units of Product based upon the proportion of such costs directly attributable to support of the manufacturing, quality assurance, quality control and other testing, storage and shipping processes for such Product . If a facility isused to manufacture Products and has the capacity to manufacture products for other programs of either [COMPANY] orMG, fixed costs shall be allocated in proportion to the actual use of such facility for the manufacture of Products andthe capacity to manufacture products for such other programs . For the avoidance of doubt, no idle capacity of amanufacturing facility, or a proportionate use thereof, shall be included in Fully Absorbed Cost of Goods except, in thecase of a facility dedicated solely to the manufacture of Products, it shall be included to the extent the JSCdetermines in good faith that such facility is appropriately sized . Fully Absorbed Cost of Goods shall exclude all costsotherwise reimbursed pursuant to this Agreement . All cost determinations made hereunder shall be made inaccordance with GAAP . Notwithstanding the foregoing, royalties paid by the manufacturing party with respect topatent rights for generic manufacturing processes used in such manufacture, but that are not primarily used for norprimarily related to Compounds, Products and/or HDAC, shall not be treated as a Third Party royalties subject toSection 11.3 below, for purposes of Section 1.42(a )