Direct and indirect materials cost can be defined in the Cambridge English Dictionary.

A direct material is any commodity that enters into a product.Cotton is a direct material for textile goods, leather for shoes, wood or plastic for furniture, etc.Some products have more than one material.biscuits are made from flour, sugar, milk, oils, and more.Raw materials are another name for direct materials.

In order to determine the cost of direct materials used in a specific year, the value of unused raw materials in store at the beginning of the year should be added to the total amount of raw material purchased during that year.It can be seen as follows.

carriage costs should be added to the value of the materials bought in the year if they are incurred on purchases of raw material.The net value of raw materials bought in the year should be taken into account if any material is returned to suppliers.

The value of raw material used will be computed if we are told that carriage inwards expenses amounted to $17.400 and returns to $5,900.

Import duties, sea or air freight, marine insurance, clearing charges, and other expenses can be incurred when raw material is imported from another country.The cost of raw material is added to by import related expenses.

If a part of the imported raw material is not satisfactory, it may be too expensive and inconvenient to return it to the overseas supplier.The purchase price of such material is often deducted from the proceeds of the sale of raw material in the same way that returns are treated.

It can't be directly charged to unit or order because the indirect material forms part of the finished product.Glue, nails, rivets and other items are examples of indirect material.The indirect material cost is divided into units manufactured.