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Definition

Indirect materials

Indirect materials are those raw materials which cannot be easily associated with the finished product.

Indirect materials have one of two characteristics: Either (1) they do not physically become part of the finished product, such as lubricants and polishing compounds. Or (2) they cannot be traced because their physical association with the finished product is too small in terms of cost, such as cotter pins and lock washers. Companies account for indirect materials as part of manufacturing overhead.

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