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Direct Materials
Raw materials that are directly used in the manufacturing process of a product and can be easily traced to it.
Factory Overhead
All indirect costs related to manufacturing, such as utilities, maintenance, and salaries of indirect labor, not directly tied to production.
Direct Materials
Materials that can be directly linked to the creation of a product and represent a large part of the cost of production.
Direct Labor
The labor cost of workers who are directly involved in the production of goods or the provision of services.
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