Question

mat t be identifll ricating oil for machili who can id kers Whcsform the materials into a finished product. n be identified directly, al l transfor orkers the materials into a finished product, often directly WI reasonable cost. manufacturing overhead Al production costs except transsufacturing overhead. Some examples of manufacturing arkers who do not work directly on the product direct labor and direct onerate, such as supervisors, mainte- materials What are the SMilaritiés belwee the Direct Materias Inventoru accoun of the rmanutacturer and manufacturer and he Direct Maasy Accougt is an inventory acount which TS maintained Merchandise Inventory accot os the merchandiser? heoe Aa d bectuke erla

Answer 1

Direct material is raw material which is used to producing or manufacturing of goods. In direct materials all material comes who are necessary required for manufacture of a good. For example if a company manufacture merchandise than they require different kind of fabric so fabrics are the raw material or direct material which is required to make the merchandise.

Merchandise inventory is the finished good or say produced good and is ready for sale to the customer.

Similarities between direct material inventory account and merchandise inventory account -

Both the inventory accounts requires careful counting at the different point of time if company is not recording inventory carefully then they can suffer loss in their production or they are also lack to meet their sales goal. Both the account works as a complementary goods to each other if the demand of merchandise inventory goes up and requirement of direct material also go up to make that number of finished goods.

Difference between both the account-

Direct material relates to the manufacture department and merchandise inventory relates to the sales department .Merchandise inventory is easy to count as it is in countable units but direct material has different kind of measurements or weight so it is not easy to count. Direct material is first stage goods and merchandise inventory is last goods.