Maintenance, repair, and operations (MRO) supplies are examples of direct materials.

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BlackTom AI · Accepted Answer

First, let's restate what the question is asking: whether Maintenance, repair, and operations (MRO) supplies are examples of direct materials.
Option 1: True. This would claim that MRO supplies are direct materials. In cost accounting and operations management, direct materials are those raw inputs that become a physical part of the finished product and whose cost can be traced directly to the product. MRO supplies, such as lubricants, cleaning agents, safety gloves, rags, and small tools used in maintenance, do not become part of the finished product; they are used in the production process or facility upkeep but are consumed in a way that cannot be traced to a single unit of product. Therefore, labeling MRO as direct materials would misclassify them.
Option 2: False. This option asserts that MRO supplies are not direct materials. This aligns with standard cost categorization: MRO items are typically considered indirect materials or maintenance, repair, and operating supplies, which support production but do not become part of the final product. They are expensed as indirect costs or allocated to overhead rather than traced to a specific product unit.
To evaluate the conceptual distinction, recall that direct materials are the tangible inputs that become integral to the finished good and whose consumption can be tracked to units of output. In contrast, MRO items are used to support production, facilities, and maintenance activities; they may enable manufacturing but are not embedded in the final product, making them indirect materials or operating supplies.
If you were choosing between definitions, the key misconception would be treating any item used during production as direct. The nuance here is that only those materials that form part of the finished product qualify as direct materials. The rest, including most MRO supplies, fall into indirect materials or maintenance costs.
In summary, True would misclassify MRO as direct materials because it ignores the traceability to the final product and the absence of incorporation into the product itself. False correctly reflects the standard distinction between direct materials and MRO supplies, which are considered indirect materials or operating expenses.

SCMN-2150-001 (Spring 2025) Module 5 Quiz

Maintenance, repair, and operations (MRO) supplies are examples of direct materials.

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