ECONOMICS

Detailed explanation-1: -Direct Costs If your company manufactures furniture, your direct materials would be the wood that goes into making your furniture along with the nails, varnish, and other products used to make furniture.

Detailed explanation-2: -Indirect materials are goods that, while part of the overall manufacturing process, are not integrated into the final product. For example, disposable gloves, personal protective equipment, tape, etc., may be essential to a production line, but they are not part of the actual product created on that line.

Detailed explanation-3: -Example of Raw Materials Below are the materials used in production: Direct raw materials: timber, wood, cushions, padding for the chairs, cloth fabric to cover the chairs. Indirect raw materials: fittings, nails, wood glue, equipment for workers.

Detailed explanation-4: -Examples of indirect materials are cleaning supplies, disposable safety equipment, disposable tools, fittings and fasteners, glue, oil, and tape.