Year 1 Y 18 2 Inventory Raw materials inventory Work-in-process (WIP) inventory Finished goods inventory 56 4 36 2 Revenue 280 16 63 18 Factory equipment rental cost Raw material purchases Factory utilities Factory building interest Factory supplies General & Administrative 10 9 44 Donations 6 Direct labor cost 60 (3) 2 0.5 Material cash discount Indirect material Insurance on shipping for purchases Indirect labor Factory maintenance Sales Salary 2.5 8.5 94 What is Direct Material Cost? Year 1 Y 18 2 Inventory Raw materials inventory Work-in-process (WIP) inventory Finished goods inventory 56 4 36 2 Revenue 280 16 63 18 Factory equipment rental cost Raw material purchases Factory utilities Factory building interest Factory supplies General & Administrative 10 9 44 Donations 6 Direct labor cost 60 (3) 2 0.5 Material cash discount Indirect material Insurance on shipping for purchases Indirect labor Factory maintenance Sales Salary 2.5 8.5 94 What is Direct Material Cost