direct material and indirect material are the two type of materials which are explained as follows :
1. Direct material : Material cost which can be easily identified in the finished product and allocated or charge to the product is a direct material cost . direct material generally become a part of the finished product such as leather in shoes , timber in furniture , sugarcane in sugar are the example of direct material .
2 . Indirect material cost : material cost which cannot be easily identified with individual cost unit is indirect material . Nails used in furniture , thread use in stitching garments are the example of indirect materials . Indirect materials are small & relatively less expensive items , which are not main part of the finished product. Lubricating oil , consumable hand tools and store , materials used for repair and maintenance work are also the example of indirect materials .
1. Direct material : Material cost which can be easily identified in the finished product and allocated or charge to the product is a direct material cost . direct material generally become a part of the finished product such as leather in shoes , timber in furniture , sugarcane in sugar are the example of direct material .
2 . Indirect material cost : material cost which cannot be easily identified with individual cost unit is indirect material . Nails used in furniture , thread use in stitching garments are the example of indirect materials . Indirect materials are small & relatively less expensive items , which are not main part of the finished product. Lubricating oil , consumable hand tools and store , materials used for repair and maintenance work are also the example of indirect materials .
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