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Common Sections in Contract Manufacturing Agreements Representations of Customer and Manufacturer. Scope of the Agreement. Intellectual Property. Term and Termination of the Agreement. Manufacturing Transfer. Forecast, Purchase and Delivery of Finished Goods. Quality System Requirements. Tooling, Equipment, and Materials.
In toll manufacturing, the customer owns the materials and the products, while in other types of contract manufacturing, the manufacturer owns them or shares them with the customer. This means that the customer bears the risk of material loss, damage, or spoilage, as well as the market fluctuations and demand changes.
Some notable examples of toll manufacturing include: Apple/Foxconn ? While everyone knows Apple, many may not recognize Foxconn. Foxconn is the manufacturer to whom Apple sends its materials such as electronic components, housings, charges, screen glass, and LEDs for the production of its computers and phones.
Tolling Costs. Tolling cost are fixed costs per unit that are added to the processing overhead of an intermediate product. These costs will be apparent within formulas and batches.