The purchase price paid or charged on the sales to and purchases of tangible personal property by a person engaged in manufacturing or compounding for use, profit or sale, shall be deemed a wholesale sale when it meets all of the following conditions:
A. It is transformed in fact by the process of manufacture;
B. It becomes by the manufacturing processes a necessary and recognized ingredient, component and constituent part of the finished product; and
C. Its physical presence in the finished product is essential to the use of the finished product in the hands of the ultimate consumer. (1968 Code §3-75; Ord. 76-168; Ord. 01-42)