Standard Costing Clause Samples
The Standard Costing clause establishes a predetermined cost framework for goods or services within a contract. It specifies that costs will be calculated based on agreed-upon standard rates or formulas, rather than actual expenses incurred during performance. This approach simplifies budgeting and accounting by providing predictable cost figures, and it helps both parties manage financial expectations and control variances, thereby reducing disputes over cost calculations.
Standard Costing. Sanofi may elect, in its sole discretion, prior to January 1 of each Calendar Year, to establish a “standard cost” for purposes of ongoing cost accounting purposes in determining Manufacturing Costs for the Optioned Product used in calculating any Allowable Expenses under this Exhibit K-1, in which case such establishment and use of standard cost accounting will be consistent with Sanofi SOPs for its other small molecule pharmaceutical products. The methodology of determining such “standard” cost shall be subject to audit as provided in Section 5.10 of this Agreement.
Standard Costing. Sanofi may elect, in its sole discretion, prior to January 1 of each Calendar Year, to establish a “standard cost” for purposes of ongoing cost accounting purposes for any Allowable Expenses payable under this Exhibit J-1, in which case a reconciliation and appropriate credit or payment shall be made annually against such Allowable Expenses actually incurred (such variance between standard costs and Allowable Expenses actually incurred, the “Annual Standard Cost Variance”), and establishment and use of standard cost accounting shall be reasonable and consistent with Sanofi’s practices for its other small molecule pharmaceutical products. In such a case, Section 1.2.1 and Section 1.2.2 shall apply mutatis mutandis to the reporting and payment of the Annual Standard Cost Variance, except that such report and payment shall only be applicable after the fourth Calendar Quarter of every year.
Standard Costing. [***] may elect, in its sole discretion, prior to [***]of each Calendar Year, to establish a “standard cost” for such Calendar Year for purposes of ongoing cost accounting purposes for [***] incurred by [***] or its Affiliates for such Calendar Year and included in Allowable Expenses that are shared by the Parties pursuant to this Section 9.4 (Profit/Loss Share) for such Calendar Year (the “Standard Cost”) and, to the extent so established for a particular Calendar Year, [***] shall provide written notice to [***] of such Standard Cost prior to January 1 of such Calendar Year. Establishment and use of standard cost accounting shall be reasonable and consistent with the applicable Accounting Standard and [***] practices for its other internal and partnered pharmaceutical programs.