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Indirect Materials are those for which a direct relationship cannot be established between materials used and the units produced. They cannot be easily identified with finished goods. Indirect materials are ancillary to production. Indirect materials cost is considered as part of overheads. Examples: (a) Lubricating oil, (b) cotton waste, (c) Grease, (d) Small tools, (e) Stationery in factory or office, stores in canteen, etc. Concept discussed in many live classes
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