Raw material is direct cost as without raw material no product can be produce and this value is also separately identifiable.
If raw material directly involve in manufacturing of production volume then it is direct cost but if raw material is required for some other task then it will be indirect cost.
Direct cost is that cost which is directly attributable to units of product like raw material and labor while indirect cost is not directly attributable like factory maintenance cost.
Direct material cost is that cost of material which is used to manufacture goods like wood for furniture etc.
The fact that cost which requires to convert raw material into finished goods like direct labor and overhead differentiate the prime cost from conversion cost which includes raw material and labor.
Cost to purchase basic raw material for the manufacturing of product is called the raw material cost like in cost of wood in furniture etc.
raw material cost variable cost because it change with volume of product i.e. the more you produce the more you have to purchase for raw material. Fixed cost are never change with changing in volume.Raw Material Cost is variable cost
raw material are indirect material
Direct cost is that cost which is directly attributable to units of product like raw material and labor while indirect cost is not directly attributable like factory maintenance cost.
direct material manufacturing cost is that raw material cost which is used to manufacture goods like wood in furniture.
direct material manufacturing cost is that raw material cost which is used to manufacture goods like wood in furniture.
Prime cost is as follows:1 - Cement (Raw material)(direct material)2 - workers (direct labor)
Direct material cost is that cost of material which is used to manufacture goods like wood for furniture etc.
1 - Raw material cost 2 - Direct labor cost 3 - Overhead Cost
Direct material is that raw material which is required to produce the goods while direct labor is that cost without which no goods can be manufactured.
the cost of direct materials which can be easily identified with the unit of production. For example, the cost of glass is a direct materials cost in light bulb manufacturing. Hope this helps!👍
The fact that cost which requires to convert raw material into finished goods like direct labor and overhead differentiate the prime cost from conversion cost which includes raw material and labor.
It is the cost converting raw material into finished goods. It comprises direct labour and manufacturing overheads.
Direct Cost:These are all those costs which directly related and allocatable to manufacturing of units of products like direct material (raw meterial), Direct labor (Salaries or wages of workforce) etc.Indirect Cost:These are those costs which are not directly allocatable to manufacturing of units of products like salary of line manager in factory or supervisors salary etc.