Question

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

Answer 1

Answer:

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

Explanation:

The direct material is the material cost which is directly related to the process of the product at the time of manufacturing the product

It can be an integral part of the finished goods as finished goods are come from direct materials and the work in process cycles.

Moreover, it also included in the total product cost along with the direct labor cost and the manufacturing overhead cost