Final answer:
Machine lubrication oil is not included in direct materials costs for a bike manufacturer because it is a factory overhead cost, while tires, seats, pedals, and handlebars are direct materials.
Step-by-step explanation:
The item that should not be included in direct materials costs for a bike manufacturer is B. Machine lubrication oil. Direct materials are those materials that are directly traceable to the product being manufactured and are an integral part of the finished product. Examples of direct materials for a bike would include A. Tires, C. Seats, D. Pedals, and E. Handlebars. Machine lubrication oil, while necessary for the manufacturing process, is considered a factory overhead or an indirect cost because it is used to maintain equipment and cannot be directly traced to the manufacturing of a specific bike.