Certified in Logistics, Transportation and Distribution (CLTD) Practice Test 2026 – Your All-in-One Resource to Complete Exam Success!

Raw material costs are considered direct costs rather than overhead costs. Direct costs can be directly traced to the production of goods or services, such as materials that are used in the manufacturing process. They are variable in nature and fluctuate based on the level of production. Overhead costs, on the other hand, are indirect expenses that are not directly tied to the creation of products or services, which include things like labor costs (in certain contexts), transportation costs (related to logistics and not production), and facility maintenance costs. These costs support the production process but do not include the raw materials themselves used in making a product. Understanding this distinction helps clarify how organizations manage and allocate their financial resources.