Cotton waste used in Factory workshop is the example of Indirect Material.
Answers
It is not always easy to distinguish between direct and indirect materials. Some materials may be used in the production process or in the services provided; however, you would still consider them indirect because they are not monetarily significant or not conveniently traceable.
For example, spices added to a hot sauce during the production of the sauce. The spices are necessary for the recipe, but they are not easily traceable. Instead, consider those spices indirect materials and treat them as such.
Indirect materials are those that are used in the production of any good but you can't identify them directly. Cotton waste is used in the factory for various purposes like one of them is to make cleaning clothes as they do not need a good cloth or yarn quality so after processing, cotton waste can be used. Another example is to produce Mops and other low grade clothes from that cotton.