Common use of DIRECT COSTS OF PROCESSING OPERATIONS Clause in Contracts

DIRECT COSTS OF PROCESSING OPERATIONS. 1. For purposes of this Chapter, direct costs of processing operations means those costs either directly incurred in, or that can be reasonably allocated to, the growth, production, or manufacture of the good. Such costs include the following, to the extent that they are includable in the appraised value of goods imported into the territory of a Party: (a) all actual labor costs involved in the growth, production, or manufacture of the specific good, including fringe benefits, on-the-job training, and the costs of engineering, supervisory, quality control, and similar personnel; (b) tools, dies, molds, and other indirect materials, and depreciation on machinery and equipment that are allocable to the specific good; (c) research, development, design, engineering, and blueprint costs, to the extent that they are allocable to the specific good; (d) costs of inspecting and testing the specific good; and (e) costs of packaging the specific good for export to the territory of the other Party. 2. For greater certainty, costs that are not included as direct costs of processing operations are those that are not directly attributable to the good or are not costs of growth, production, or manufacture of the good. These include: (a) profit; and (b) general expenses of doing business that are either not allocable to the good or are not related to the growth, production, or manufacture of the good, such as administrative salaries, casualty and liability insurance, advertising, and salesmen’s salaries, commissions, or expenses.

DIRECT COSTS OF PROCESSING OPERATIONS. 1. For purposes of this Chapter, direct costs of processing operations means those costs either directly incurred in, or that can be reasonably allocated to, the growth, production, or manufacture of the good. Such costs include the following, to the extent that they are includable in the appraised value of goods imported into the territory of a Party: (a) all actual labor costs involved in the growth, production, or manufacture of the specific good, including fringe benefits, on-the-job training, and the costs cost of engineering, supervisory, quality control, and similar personnel; (b) tools, dies, molds, and other indirect materials, and depreciation on machinery and equipment that are allocable to the specific good; (c) research, development, design, engineering, and blueprint costs, costs to the extent that they are allocable to the specific good; (d) costs of inspecting and testing the specific good; and (e) costs of packaging the specific good for export to the territory of the other Party. 2. For greater certainty, costs those items that are not included as direct costs of processing operations are those that are not directly attributable to the good or are not costs of growth, production, or manufacture of the good. These include: (a) profit; and (b) general expenses of doing business that are either not allocable to the specific good or are not related to the growth, production, or manufacture of the good, such as administrative salaries, casualty and liability insurance, advertising, and salesmen’s 's salaries, commissions, or expenses.

DIRECT COSTS OF PROCESSING OPERATIONS. 1. For purposes of this Chapter, direct costs of processing operations means those costs either directly incurred in, or that can be reasonably allocated to, the growth, production, or manufacture of the good. Such costs include the following, to the extent that they are includable in the appraised value of goods imported into the territory of a Party: (a) all actual labor costs involved in the growth, production, or manufacture of the specific good, including fringe benefits, on-the-job training, and the costs cost of engineering, supervisory, quality control, and similar personnel; (b) tools, dies, molds, and other indirect materials, and depreciation on machinery and equipment that are allocable to the specific good; (c) research, development, design, engineering, and blueprint costs, costs to the extent that 4-4 they are allocable to the specific good; (d) costs of inspecting and testing the specific good; and (e) costs of packaging the specific good for export to the territory of the other Party.. 4-5 2. For greater certainty, costs those items that are not included as direct costs of processing operations are those that are not directly attributable to the good or are not costs of growth, production, or manufacture of the good. These include: (a) profit; and (b) general expenses of doing business that are either not allocable to the specific good or are not related to the growth, production, or manufacture of the good, such as administrative salaries, casualty and liability insurance, advertising, and salesmen’s salaries, commissions, or expenses.

DIRECT COSTS OF PROCESSING OPERATIONS. 1. For purposes of this Chapter, direct costs of processing operations means those costs either directly incurred in, or that can be reasonably allocated to, the growth, production, or manufacture of the good. Such costs include the following, to the extent that they are includable in the appraised value of goods imported into the territory of a Party: (a) all actual labor costs involved in the growth, production, or manufacture of the specific good, including fringe benefits, on-the-job training, and the costs cost of engineering, supervisory, quality control, and similar personnel; (b) tools, dies, molds, and other indirect materials, and depreciation on machinery and equipment that are allocable to the specific good; (c) research, development, design, engineering, and blueprint costs, costs to the extent that they are allocable to the specific good; (d) costs of inspecting and testing the specific good; and (e) costs of packaging the specific good for export to the territory of the other Party. 2. For greater certainty, costs those items that are not included as direct costs of processing operations are those that are not directly attributable to the good or are not costs of growth, production, or manufacture of the good. These include: (a) profit; and (b) general expenses of doing business that are either not allocable to the specific good or are not related to the growth, production, or manufacture of the good, such as administrative salaries, casualty and liability insurance, advertising, and salesmen’s salaries, commissions, or expenses.