Answer
(a). Direct Materials are materials used directly in the manufacturing process and whose costs can be easily traced to the finished good.
(b). Indirect materials are smaller materials such as nails or glue that may be important to the finished product but whose costs cannot be easily traced to the finished good. Indirect materials are usually added to manufacturing overhead when costing.
(c.) Direct labor is factory labor whose costs can be easily traced to the finished good.
(d). Indirect labor is made up of factory supervisors, janitorial staff, and others who work in the factory but do not directly work on the product. Indirect labor is usually added to manufacturing overhead when costing a product.
(e.) Manufacturing Overhead includes all manufacturing costs less direct labor and direct materials.
Work Step by Step
See glossary for definitions.
