Question

Materials must have which two qualities in order to be classified as direct materials? a.They must be an integral part of the finished product, but can be an insignificant portion of the total product cost. b.They must be introduced into the process in both work in process inventories and finished goods inventories. c.They must be an integral part of the finished product and a significant portion of the total product cost. d.They must be classified as both prime costs and conversion costs.

Answer 1

Answer:

c.They must be an integral part of the finished product and a significant portion of the total product cost.

Explanation:

Direct material is the key component of finished product, it is what is called finished product after processing.

It might be combination of so many raw materials or that it might be alone.

Thus, it forms an integral part of finished product and also it involves a huge share that is clearly identifiable in the total cost as raw material.

Which is because generally overheads do not have that share in cost, as much as that of raw materials.