Examples of direct materials include bricks, shingles, wooden beams and floorboards for a house. Paper for the manufacture of paper bags is also a direct material. Direct materials are defined as raw materials, parts and subassemblies that go into a finished product.
Direct materials are able to be measured, kept track of and counted. The amount of paper in paper bags is easily determined, but the amount of glue used to keep the bag together is not ascertainable. In this case, paper is a direct material, but glue is not, even though both are raw materials.
Indirect materials include items that are used to make a product but do not go into the final product. Indirect materials include oil consumed in automated machines that produce items, sandpaper consumed to make wooden products and welding rods consumed for large metal objects.