3.1.3. Raw material and consumables

The Raw Materials and Consumables comprises the costs that are directly attributable to the production of a good or a service, meaning that it includes all consumables (components) that are part of the final product or that are necessary to consume to provide the service.

Sold products imply using raw materials and consumables, for manufacturing is a transformation and assembly process. But some services need Raw materials and consumables as well.

In most situations the accounts related to raw materials and consumables are variable costs.

Example – Service with consumption of raw materials and consumables

When a hotel rents a room it is providing a service. But while providing that service, the hotel needs to have buy breakfast food and bathroom supplies, which are goods that are consumed by the guests. In such cases those would be regarded as consumables of the service.