direct materials cost


direct materials cost
Expenditure on direct materials It is one of the cost classifications that make up the direct cost of a cost unit and is ascertained by collecting together the quantities of each material used on each product by means of materials requisitions and multiplying the quantities by the cost per unit of each material. A percentage on direct materials cost is sometimes used as a basis for absorbing production overheads to the cost unit in absorption costing

Big dictionary of business and management. 2014.

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  • Direct materials cost — is the cost of direct materials which can be easily identified with the unit of production. For example, the cost of glass is a direct materials cost in light bulb manufacturing[1]. The manufacture of products or goods required material as the… …   Wikipedia

  • direct materials cost — Expenditure on direct materials. It is one of the cost classifications that make up the prime cost of a cost unit and is ascertained by collecting together the quantities of each material used on each product by means of materials requisitions… …   Accounting dictionary

  • standard direct materials cost — In standard costing, a standard cost derived from the standard quantity of materials allowed for the production of a product and the standard direct materials price for the materials specified for that product …   Accounting dictionary

  • standard direct materials cost — In standard costing, a standard cost derived from the standard quantity of materials allowed for the production of a product and the standard direct materials price for the materials specified for that product …   Big dictionary of business and management

  • Direct milling cost —   Operating costs directly attributable to the processing of ores or other feed materials, including labor, supervision, engineering, power, fuel, supplies, reagents, and maintenance.   U.S. Dept. of Energy, Energy Information Administration s… …   Energy terms

  • direct materials — UK US noun [plural] PRODUCTION ► things that are used in making a product that become a part of that product when it is finished: »Direct materials include the raw materials and components used in manufacturing. »The first step in determining a… …   Financial and business terms

  • direct materials — Materials that are directly incorporated in the final product or cost unit of an organization. For example, in the production of furniture, direct materials would include wood, glue, and paint. Compare: indirect materials …   Accounting dictionary

  • direct materials — Materials that are directly incorporated in the final product or cost unit of an organization. For example, in the production of furniture, direct materials would include wood, glue, and paint. Compare indirect materials …   Big dictionary of business and management

  • direct materials total cost variance — A combination of the direct materials price variance and the direct materials usage variance; it compares the actual cost and the standard cost of the direct material consumed in carrying out the actual production. The formula for this variance… …   Accounting dictionary

  • materials cost — The expenditure incurred by an organization on direct materials or indirect materials The expenditure on direct materials is part of direct cost of sales and that on indirect materials is a manufacturing overhead …   Big dictionary of business and management