Section 015-20-VII - COST OF MILK TO AN INTEGRATED OPERATIONA. Overview. The cost of milk to an integrated operation shall be the integrated operation's raw product costs plus all expenses of the integrated operation directly and indirectly incurred in the receiving, processing, packaging, delivering/shipping, handling and selling milk. Examples of expenses directly and indirectly incurred in the receiving, processing, packaging, delivering/shipping, handling and selling milk are set forth in Section I(B) and W.B. Raw Product Costs. The raw product costs of an integrated operation shall be determined as set forth in Section V.(B).C. Actual Expenses: McClain Wholesale and Retail Cost Accounting Systems. The Commission may determine the expenses of an integrated operation directly and indirectly incurred in receiving, processing, packaging, delivering/shipping, handling and selling milk according to the McClain System contained in Rule 5A and the McClain System (retail) described in Section VI.(B). Procedures for the collection of McClain System reports, forms, and other information set forth in Sections V.(B) and (E) (1) and VI.(B) shall apply to integrated operations. Alternatively, an integrated operation may also submit a determination of its expenses by a cost accounting system other than the McClain System and request that the Commission use such other system to determine the integrated operation's expenses. An integrated operation submitting a determination of expenses by a cost accounting system other than McClain must demonstrate, and the Commission must find, that the cost accounting system is regularly used by the integrated operation in the conduct of its business, that it is based on generally accepted cost accounting principles and that it is at least equivalent to the McClain System in comprehensiveness and reliability as to expenses incurred in receiving, processing, packaging, delivering/shipping, handling and selling milk. Where these. findings are not made, the integrated operation shall prepare and file, within the time specified by the Commission, the McClain System reporting forms required by Rule 5A and the McClain System (retail) reports. Where these findings are made, the Commission will rely on the system submitted by the integrated operation as the appropriate demonstration of the integrated operation's actual expenses.D. Imputed Expenses Based on Combined Dealer and Retail Margins. 1. The Commission may determine the imputed expenses of an integrated operation directly and indirectly incurred in receiving, processing, packaging, delivering/shipping, handling and selling milk by multiplying the integrated operation's retail selling price for the regulated product by that percentage shown on Table IV which most closely corresponds to the raw product cost per hundredweight, as adjusted for butterfat content under Section V.(B) (1) (b), that was paid by the integrated operation with respect to the regulated product.2. Upon request of the Commission, an integrated operation shall promptly furnish to the Commission, within the time set by the Commission, all information necessary for it to determine the raw product cost paid by the integrated operation for the regulated product. In the absence of a timely response the Commission shall determine imputed expenses for purposes of this subsection on the basis of the Maine Class I price, subject to adjustment for butterfat content, which was in effect at the time of the transaction under examination.3. Any proof of actual expenses lower than the imputed expenses of receiving, processing, packaging, delivering/shipping, handling and selling the regulated product as calculated by the Commission under this subsection shall be made by the integrated operation in the manner provided in C. for the determination by the Commission of actual expenses of integrated operations.01- 015 C.M.R. ch. 20, § VII