Mel Finney claims that the distinction between direct and indirect materials is based entirely on physical association with the product. Is Mel correct? Why?

No

Explanation:

The distinction can depends also upon the convenience of accounting for the amount as indirect or direct. For instance, in a candy manufacturer, if for each unit needs one bag of sugar, then it will not be difficult to give account for, the amount for the cost of the sugar is a direct cost; but if we assume that each unit requires 2 teaspoons of sugar, it will be very difficult to account for the cost of the sugar as a direct cost (note, sugar is not being bought by the teaspoon!) It will be easier to give account for the sugar as an indirect (or factory overhead) cost. The cost will still be tracked to individual units of inventory, but in another way.