Which of the following is an example of direct materials?

Direct materials refer to the primary materials that are used in the production of a finished product. These materials can be directly traced to the final product, meaning they are integral to its creation and can be directly measured in terms of quantity and cost.

Raw steel used in manufacturing cars qualifies as direct materials because it is a fundamental component in the production process of automobiles. It can be easily identified and attributed to the specific product being manufactured, which is essential for calculating production costs accurately. By understanding this concept, students can distinguish between costs that are directly associated with the product versus those that are considered overhead or indirect costs, such as rent, salaries of indirect workers, or insurance on the manufacturing plant. These indirect costs contribute to overall expenses but do not have a direct traceability to a specific product.