Direct costs of processing operations
(e) Direct costs of processing operations(1) Items included. For purposes of paragraph (a) of this section, the words direct costs of processing operations mean those costs either directly incurred in, or which can be reasonably allocated to, the growth, production, manufacture, or assembly of the specific merchandise under consideration. Such costs include, but are not limited to the following, to the extent that they are includable in the appraised value of the imported merchandise: (i) All actual labor costs involved in the growth, production, manufacture, or assembly of the specific merchandise, including fringe benefits, on-the-job training, and the cost of engineering, supervisory, quality control, and similar personnel; (ii) Dies, molds, tooling, and depreciation on machinery and equipment which are allocable to the specific merchandise; (iii) Research, development, design, engineering, and blueprint costs insofar as they are allocable to the specific merchandise; and (iv) Costs of inspecting and testing the specific merchandise. (2) Items not included. For purposes of paragraph (a) of this section, the words direct costs of processing operations do not include items which are not directly attributable to the merchandise under consideration or are not costs of manufacturing the product. These include, but are not limited to: (i) Profit; and (ii) General expenses of doing business which either are not allocable to the specific merchandise or are not related to the growth, production, manufacture, or assembly of the merchandise, such as administrative salaries, casualty and liability insurance, advertising, and salesmen's salaries, commissions, or expenses.