Which materials fall under the 'raw goods' type of inventory?

Asked a year ago

Hi there! I have found out that 'raw goods' represent an asset on the balance sheet of a company. However, I do not know anything about 'raw goods,' despite the fact that it is a type of inventory. Which materials fall under this category?

Abeeha Qasmi

Monday, November 14, 2022

Raw material inventory constitutes the sum of all the in-stock supplies that are not currently being produced. The raw materials used in this type of inventory can be broadly classified into two categories:

  1. Direct materials: They are consumed directly in the manufacture of goods.
  2. Indirect material: These are not a component of your final product but help in the manufacturing process.

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