| Definition: | Materials are physical goods (and their cost) used in the manufacture of a product, often separated into direct material (that which goes directly into the product such as cream into ice cream, or steel into cars) and indirect material (that which is used in maintaining the manufacturing environment such as cleaning fluids or oil for lubrication of manufacturing equipment). Indirect materials are usually part of the overhead component of cost. The term material, when used without the direct or indirect qualifier, usually refers to direct materials.
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