Manufacturing a product needs input of raw materials. Raw materials are main component of the product. There are two types of materials; direct materials and indirect materials.
1. Direct Materials
The materials required for producing a product are called direct materials. Direct materials are also known as raw materials or input materials. Direct raw materials constitute the main component or part of a finished product. It is identified in terms of cost per unit of output. Wood for furniture industry, sugarcane for sugar mills. textile for garment industry are some of the examples of direct materials.
2. Indirect Materials
The materials that can not be form as the main part of a finished product are called indirect materials. Therefore, such materials can not be easily identified with the product. Nails used in furniture industry and threads used in garment industry are some example of indirect materials.
1. Direct Materials
The materials required for producing a product are called direct materials. Direct materials are also known as raw materials or input materials. Direct raw materials constitute the main component or part of a finished product. It is identified in terms of cost per unit of output. Wood for furniture industry, sugarcane for sugar mills. textile for garment industry are some of the examples of direct materials.
2. Indirect Materials
The materials that can not be form as the main part of a finished product are called indirect materials. Therefore, such materials can not be easily identified with the product. Nails used in furniture industry and threads used in garment industry are some example of indirect materials.