John V. | Browning incurred in the wr. period if they hed the in 1952) 13, 1953 been the date of usual course of preceding production (December exportation their of 3, guns, those of manufacture a normal in made ce : Mareh business, in the experimental production of Incidentally, thoge sample guns, there Was no gost of labor for the assembling and fitting ¥whi ch was done by the"hichly pafld executives and in addition engineers” to which your letter re fers, unless, to the salaries which those officers and engineers were paid they received extra compensation for thelr reculer services, for fitting and assembling United States “(Sun Life v. those guns. *.W. “Myers & Assurance decidedby Co. Customs Go., Inc. of Ganada), Court, Jan.1, L1932:C.R. 2227. On the other hand, in the production of those guns, as contemplated by the rere ike there is a cost of labor for that fitting, in an amount represented by the time assembling and for that work at the waces ordinarily payordinarily ws able therefor. The the usual chandiseé, second element general ROSESSS tneludine, in my of statutory cost of production is in the case of such or similar mer~ opinion, not only factory overhead expenses but also selling and administrative expenses, These expenses must amount to not less than 10 per cent of the cost of materials and labor. Here again, however, you will note that the statute is concerned with what is usual - not with what is unusual. In short, the limitation of this element to the usual general expenses excludes from the statutory cost of production of the sample gune in question any general expenses (whether factory overhead, sélling or administrative) which were unusual, i.e., Gifferent in kind or emount from what would have been incurred if those euns had been produced in the ordinary way in the usual course of business. : Under the heading of "usual general expenses", thereroth would be all ordinary expenses which are not traceable and directly chargeable to the production of any particular uns, Ore, rent, Licht, heat, power, depreciation of machinery and equipment, storage, etc., a8 well as salaries or wages for services other than labor in making or packing guns. As a rule, such expenses are spread over the manufacturer's whole output during the = ant t ea2th period of in which procuction they are incurred in a ratio which and are chargeable each unit bears to