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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.
Tracking Your Actual Costs. Tracking your costs involves calculating the actual costs of the direct materials, direct labor and factory overhead. For example, it takes $2 of direct materials and 4 labor hours at $10 per hour, or $40, to produce one completed unit at $42 per unit.The actual indirect costs are $1 per unit. Your total actual cost per unit is $43.If you produce 10,000 units, your actual manufacturing costs are 10,000 multiplied by $43, or $430,000.or example, it takes $2 of direct materials and 4 labor hours at $10 per hour, or $40, to produce one completed unit at $42 per unit. The actual indirect costs are $1 per unit. Your total actual cost per unit is $43. If you produce 10,000 units, your actual manufacturing costs are 10,000 multiplied by $43, or $430,000.