Basic Materials

the material physical elements of production that constitute a large part of the subjects of labor used by enterprises (or construction sites) and that make up the main substance of output.

Basic materials participate in production through the course of one production cycle, and their value is fully transferred to the value of the output produced. Basic materials in industry include the raw materials (the output of the extracting sectors of industry and of agriculture) and other materials (the products of primary processing of raw material) that are included directly in the makeup of an enterprise’s output. The distinction between basic and auxiliary materials is based on the characteristics of their use at enterprises in the particular sector. Certain types of materials may be basic materials in one sector of industry and auxiliary materials in a different sector (for example, tool steel at a tool plant or the same steel intended for use in the tool shop of an auxiliary enterprise; paper at a printing combine or paper used to make packaging materials, tags, and labels in such sectors as light industry or the food industry).

Basic materials constitute a significant part of the value and prime costs of output. An increase in the volume of production and construction leads to a systematic growth in basic materials in the form of stocks of commodities and materials, which are part of circulating assets. With the intensification of social production, reducing the consumption of materials in output becomes enormously important.

The degree of use of basic materials in production is described by a coefficient whose absolute value is always less than one. This coefficient is defined as the ratio of the weight of the of the basic materials in the final product to the weight of the same materials when they were put into processing. The degree to which the absolute value of this coefficient is less than one characterizes the extent of waste in production (scrap, defective goods, and the like). Economy in the use of basic materials is determined by the specific expenditure of these materials per unit of output, with due regard for quality (per unit of productivity, capacity, and the like).