Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 15 - No. 1)

What is the key difference between direct materials and indirect materials?

Direct materials are used in the production process, while indirect materials are not.

Direct materials are a significant component of a finished product, while indirect materials are not.

Direct materials are the raw materials, while indirect materials are the supplies.

There is no difference

Direct materials are readily identifiable with a finished product, while indirect materials are not a significant component.