Commercial Applications
The cost of raw materials used in production is considered an indirect cost.
- True
- False
Cost
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Answer
False
Reason — Raw materials that become an integral part of the finished product and can be easily measured and directly charged to the product are direct materials (a direct cost), not indirect. For example, cloth in dress making and timber in furniture are direct materials. Only items like grease, oil, nails and consumable stores — which cannot be specifically charged to a product — are treated as indirect materials.
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Related Questions
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