How do direct materials differ from indirect materials What

Solution

Answer:

Direct Material: Direct material are the material which are easily identified with the cost of production. They can be conveniently measured and directly charged to the cost of product. It is a part of the finished product.

Indirect Material: Indirect Material are the materials which cannot be conveniently identified with the cost of production. In simple words, indirect materials are used in production process ,but are not linked with a specific product. These are overhead costs. These are also called factory costs.

Examples of indirect material which can be used in production of automobiles are screws, nuts and bolts. These are integral part of the car but they are not directly related to it.