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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.
The standard rate is an estimate of what you expect the direct cost of labor will be under normal conditions. There are two primary components of this model: the projected cost of one hour of direct labor and the number of labor hours required to produce one unit.Suppose your total cost for one hour of direct labor is $15 and you expect to use 0.5 hours per unit of production.If your shop produces 1,000 units weekly, your standard labor cost is $7,500.he standard rate is an estimate of what you expect the direct cost of labor will be under normal conditions. There are two primary components of this model: the projected cost of one hour of direct labor and the number of labor hours required to produce one unit.