California Codes, Business and Professions Code - BPC, Division 7 — General Business Regulations, Part 2 — Preservation and Regulation of Competition, Chapter 4 — Unfair Trade Practices, Article 2 — Definitions, Section 17026
“Cost” as applied to production includes the cost of raw materials, labor and all overhead expenses of the producer.
“Cost” as applied to distribution means the invoice or replacement cost, whichever is lower, of the article or product to the distributor and vendor, plus the cost of doing business by the distributor and vendor and in the absence of proof of cost of doing business a markup of 6 percent on such invoice or replacement cost shall be prima facie proof of such cost of doing business.
“Cost” as applied to warranty service agreements includes the cost of parts, transporting the parts, labor, and all overhead expenses of the service agency.
Discounts granted for cash payments shall not be used to reduce costs.
Notes
Defines production cost as raw materials, labor, and producer overhead; distribution cost as the lower of invoice or replacement cost plus business costs, with a 6% markup as prima facie business cost when proof is absent; and warranty-service cost as parts, parts transport, labor, and overhead. Cash-payment discounts may not reduce cost.
Use as reference
Lexinter.net | California Code, Business and Professions Code - BPC § 17026 | https://laws.lexinter.net/codes/california/business-and-professions-code/division-7/part-2/chapter-4/article-2/section-17026