Direct vs Indirect Materials Cost

Invoice price less discounts

Supplies

Basic compensation

<p>Indirect materials</p> Signup and view all the answers

<p>Direct materials are materials that form an integral part of the finished product, and the costs included are invoice price less discounts, sales taxes, customs duties, delivery costs paid to vendors, and cost of delivery containers, net of deposit refunds.</p> Signup and view all the answers

<p>Indirect materials are those materials needed to complete a product, but their use is minimal or complex. Examples include glues, nails, welding materials, grease, lubricating oil, cleaning rags, and brushes.</p> Signup and view all the answers

<p>Direct labor is the labor directly involved in making the product, and the elements included in direct labor cost are basic compensation, production efficiency bonuses, employer's portion of social security taxes, and cost of living allowance (COLA).</p> Signup and view all the answers

<p>Direct labor costs are the labor costs directly involved in making the product, and they are related to the production process by being traceable without undue cost or inconvenience.</p> Signup and view all the answers

<p>Direct materials are materials that form an integral part of the finished product, and the costs included as part of direct material costs are invoice price less discounts, sales taxes, customs duties, delivery costs paid to vendors, and cost of delivery containers net of deposit refunds.</p> Signup and view all the answers

<p>Indirect materials are materials needed to complete a product, but the use of which is so minimal or complex that treating them as direct materials is futile. Some examples of indirect materials are glues, nails, welding materials, grease, lubricating oil, cleaning rags, and brushes.</p> Signup and view all the answers

<p>Direct labor is the labor directly involved in making the product, and the elements included in direct labor cost are basic compensation, production efficiency bonuses, employer's portion of social security taxes, and cost of living allowance (COLA).</p> Signup and view all the answers

<p>Direct labor costs are the labor costs directly involved in making the product, and they are related to the production process by being specifically traced to the product without undue cost or inconvenience.</p> Signup and view all the answers