Direct Materials definition. Analyzing the definition of key terms often provides more insight about concepts. Direct Materials can be defined as – Raw material that physically becomes part of the product and is clearly identified with specific products or batches of products. Direct materials is a term used in manufacturing companies, direct materials being materials that will be included in inventory, materials that can be directly tracked to a job or process. Inventory can be thought of as including direct materials, direct labor, and overhead. When tracking the inventory costs, it is useful to assign costs to products, jobs, or processes. Direct materials can be tracked in this way and will move from materials to work in process, to finished goods, and finally be expensed as part of costs of goods sold.
