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For this situation, the calculation of total manufacturing cost is as follows: 1  Direct materials. 2  Add the total cost of materials purchases in the period to the cost of beginning inventory, and subtract the cost of ending inventory.3  The result is the cost of direct materials incurred during the period. 4  Direct labor. Direct materials. 2  Add the total cost of materials purchases in the period to the cost of beginning inventory, and subtract the cost of ending inventory. 3  The result is the cost of direct materials incurred during the period. 4  Direct labor.
Calculating Material Burden Rate. The general formulae to calculate material burden rate is = budgeted manufacturing overheads / base. The most popular base, is the direct labor cost as a basis, in which case the formulae to calculate the material burden rate reads = budgeted overhead / direct labor cost. If the base is taken as labor hours instead of labor costs, the formulae reads = budgeted manufacturing overheads / direct labor hours.