Direct Vs Indirect Materials

When it comes to business operations, there is a clear distinction between direct and indirect materials. Direct materials are those that are used in the production of a product or service and are an integral part of the finished product. Examples of direct materials include raw materials, components, and supplies. On the other hand, indirect materials are those that are used in the production process but are not part of the finished product. Examples of indirect materials include tools, office supplies, and protective gear. It is important to understand the difference between direct and indirect materials as it can affect the overall cost of production and the profitability of a business. By understanding the difference between the two, businesses can make informed decisions about which materials to use and how to manage their costs.