Saturday, January 12, 2008

What are Direct Materials?

Direct Materials (DM) are raw materials that become a specific part of a product and that can be specifically traced directly to it. Direct material cost is the cost of the raw materials and components used to create a product. One easily be able to identify a direct material as part of the finished product. The opposite of a direct material is an indirect material and is typically only a smaller part of the finished product.

Examples of Direct Materials (DM)

  • Iron
  • Aluminum
  • Wood
  • Nuts and Bolts
  • Glass

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The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.