Which of the following costs would be included as part of direct materials in the production of an automobile?
A)glue for a sticker applied to the automobile
B)steel used in the frame of the automobile
C)gasoline used to fuel machines in production
D)heat used to heat the building

Question

Quizplus · Accepted Answer

Direct materials are materials that can be directly traced to the finished product, and are a significant part of the final product. Steel used in the frame of an automobile is a direct material as it is a significant part of the final product. Glue for a sticker applied to the automobile is not significant enough to be considered as direct materials. Gasoline used to fuel machines in production and heat used to heat the building are both indirect materials, as they cannot be directly traced to the finished product.

Which of the Following Costs Would Be Included as Part