Direct Materials

Home » CMA Glossary Term » Cost Accounting » Direct Materials

Direct materials refer to the raw materials that are directly incorporated into the production of a finished product. These materials are essential components and can be directly traced to the end product, making them a crucial element in calculating the cost of goods sold. The cost of direct materials is a variable cost, fluctuating with production levels. Accurate tracking of direct material costs is vital for effective cost management and pricing strategies.

CMA Exam Academy 16-Week Accelerator Program