how to calculate direct materials cost in accounting
Save. In financial accounting, inventory value is the sum of direct materials, direct labor and manufacturing overhead costs incurred to create the product. Total direct materials cost can be calculated at the end of the year to analyze inventory costs. It's also a component in work-in-progress inventory.or purposes of inventory calculation, the direct materials account includes the cost of materials used rather than materials purchased. To calculate direct materials, add beginning direct materials to direct materials purchases and subtract ending direct materials.