accounting definition of material cost
Raw Materials Inventory. Definition: Raw materials inventory is the total cost of all component parts currently in stock that have not yet been used in work-in-process or finished goods production. There are two subcategories of raw materials, which are:1  Direct materials.2  These are materials incorporated into the final product.he accounting is: 1  Direct materials. 2  Debit the work-in-process inventory account and credit the raw materials inventory asset account. 3  Or, if the production process is brief, bypass the work-in-process account and debit the finished goods inventory account instead. 4  Indirect materials. Definition: a cost of materials or supplies used, or an aggregate of such costs. A material cost may be either a ‘direct material cost’ or an ‘indirect material cost’ depending on whether it is a direct cost or an indirect cost. An alternative form of the term is ‘materials cost’. material cost may be either a ‘direct material cost’ or an ‘indirect material cost’ depending on whether it is a direct cost or an indirect cost. An alternative form of the term is ‘materials cost’. a cost of materials or supplies used, or an aggregate of such costs. A material cost may be either a ‘direct material cost’ or an ‘indirect material cost’ depending on whether it is a direct cost or an indirect cost.An alternative form of the term is ‘materials cost’. material cost may be either a ‘direct material cost’ or an ‘indirect material cost’ depending on whether it is a direct cost or an indirect cost. An alternative form of the term is ‘materials cost’. cost. In accounting, cost is defined as the cash amount (or the cash equivalent) given up for an asset. Cost includes all costs necessary to get an asset in place and ready for use.For example, the cost of an item in inventory also includes the item's freight-in cost.ost. In accounting, cost is defined as the cash amount (or the cash equivalent) given up for an asset. Cost includes all costs necessary to get an asset in place and ready for use. Definition. The amount of money invested in the production of a product. The ingredients of a meal or the parts of a machine would be things that incur material costs. This cost is apart from the cost of labor to produce the product.The material cost together with the cost of labor helps determine the total cost of a product and its eventual sale price.he ingredients of a meal or the parts of a machine would be things that incur material costs. This cost is apart from the cost of labor to produce the product. Full Definition of COST ACCOUNTING. : the systematic recording and analysis of the costs of material, labor, and overhead incident to production. See cost accounting defined for English-language learners. ADVERTISEMENT.ull Definition of COST ACCOUNTING. : the systematic recording and analysis of the costs of material, labor, and overhead incident to production. See cost accounting defined for English-language learners. ADVERTISEMENT. Cost is a sacrifice of resources to obtain a benefit or any other resource. For example in production of a car, we sacrifice material, electricity, the value of machine's life (depreciation), and labor wages etc.Thus these are our costs.Costs are usually classified as follows: Manufacturing overhead: Represents all production costs except those for direct labor and direct materials, for example the cost of an accountant's time in an organization, depreciation on equipment, electricity, fuel, etc. Cost and Cost Classifications. Cost is a sacrifice of resources to obtain a benefit or any other resource. For example in production of a car, we sacrifice material, electricity, the value of machine's life (depreciation), and labor wages etc. Thus these are our costs.Costs are usually classified as follows: Manufacturing overhead: Represents all production costs except those for direct labor and direct materials, for example the cost of an accountant's time in an organization, depreciation on equipment, electricity, fuel, etc. The accounting is: 1  Direct materials. 2  Debit the work-in-process inventory account and credit the raw materials inventory asset account. 3  Or, if the production process is brief, bypass the work-in-process account and debit the finished goods inventory account instead. 4  Indirect materials.he accounting is: 1  Direct materials. 2  Debit the work-in-process inventory account and credit the raw materials inventory asset account. 3  Or, if the production process is brief, bypass the work-in-process account and debit the finished goods inventory account instead. 4  Indirect materials. Introduction to Standard Costing. Standard costing is an important subtopic of cost accounting. Standard costs are usually associated with a manufacturing company's costs of direct material, direct labor, and manufacturing overhead.ntroduction to Standard Costing. Standard costing is an important subtopic of cost accounting. Standard costs are usually associated with a manufacturing company's costs of direct material, direct labor, and manufacturing overhead.
A cost of materials or supplies used, or an aggregate of such costs.