7 Pa. Code § 149.23
Although it is agreed that both the Board and, in some areas, the Federal government "control" the cost of raw products purchased from producers, the division of costs into controlled and noncontrolled for financial reporting is dependent only on whether or not the Board establishes a price for the sale of the packaged item. Costs must be classified as controlled or noncontrolled to parallel the classification of the related sales. For example: Sales of packaged fluid milk products delivered to an out-of-State customer are noncontrolled because the Board does not establish the sales prices. Even though the product delivered in the was purchased as raw product from a producer in this Commonwealth at a price established by the Board, the cost of sales for these items is non-controlled, as are the containers in which they are packaged. All plant and delivery expenses must also be noncontrolled so the "points" or "dollars" related to the sale must be recorded as noncontrolled in worksheets used for computing allocation percentages. An in-State sale to an agency of the Federal government on ceded land is also noncontrolled, so all costs associated with it must be recorded as noncontrolled.
7 Pa. Code § 149.23