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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.
Manufacturing and Nonmanufacturing Costs. Manufacturing (direct materials, direct labor, factory overhead) and non-manufacturing costs; product and period costs; raw materials, work-in-process and finished goods; cost of goods manufactured and cost of goods sold; cost accounting cycle.irect materials as a type of manufacturing costs. Direct materials are raw materials that become an integral part of the finished goods. Direct materials should be distinguished from indirect materials (part of overhead costs), about which we will talk later.