Direct materials are the raw materials that are used directly in the production of a product. These materials can be easily traced to the finished goods, such as the wood used to make furniture or the fabric used to create clothing. They are essential for manufacturing and are a key component of the overall cost of production. In accounting, direct materials are categorized as a part of the cost of goods sold (COGS). This means that businesses must track these materials closely to understand their expenses and profitability. Proper management of direct materials can lead to more efficient production processes and reduced costs.