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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.
Direct Material: raw materials that become a part of the finished product and are easily traced to one product. Manufacturing Overhead: all costs of manufacturing the product except direct materials and direct labor. Costs associated with operating the factory that makes the product.If the cost has the word âfactoryâ, âplantâ, âmanufacturingâ, as a descriptive word, the cost will be part of manufacturing overhead.Period: Selling, administrative, and warehouse costs.They are reported on the income statement as expenses as they are incurred. Product: all costs that are required to make a product.f the cost has the word âfactoryâ, âplantâ, âmanufacturingâ, as a descriptive word, the cost will be part of manufacturing overhead. Period: Selling, administrative, and warehouse costs. They are reported on the income statement as expenses as they are incurred. Product: all costs that are required to make a product.