Final answer:
Direct materials are recorded as a cost of goods manufactured when used in production, not when purchased, which makes the initial statement false. Bulk reducing industries locate near raw material sources to save on transport, as the final product is cheaper to ship.
Step-by-step explanation:
The statement that direct materials become a cost of the finished goods when they are acquired is false. In accounting and cost management, the costs of direct materials are only recorded as a cost of goods manufactured when the materials are actually used in the production process, not when they are purchased and stored. This follows the accounting principle of matching costs with revenues, ensuring that the cost of materials is aligned with the production of goods they are used to manufacture.
Regarding bulk reducing and bulk gaining industries, bulk reducing industries are located near the source of raw materials to minimize transportation costs because the finished product is less expensive to transport. On the other hand, electronic manufacturing, like computers, usually has a high value of technology which can make the physical materials' cost seem small in comparison. However, this does not change the fact that the costs of direct materials are accounted for in the production phase.