Barron's Corp. manufactures custom made wire baskets used to hold computer components in computer manufacturing operations. Wages:
Machine operators $400,000
Maintenance workers 45,000
Factory supervisors 90,000
Materials used:
Metal wire $600,000
Lubricant for oiling machines 5,000
Clear plastic coating 420,000
Barron's direct material costs amounted to:

Question

Quizplus · Accepted Answer

Direct material costs include only the costs of materials that are directly used in the production of the product. In this case, the direct materials are the metal wire ($600,000) and the clear plastic coating ($420,000), totaling $1,020,000.