Deductions & credits

So where do I input the material expenses? Or should I do the math on the side and only insert my taxable total? Do I put in under Inventory/Cost of Goods Sold or maybe somewhere under Business Expenses?

 

Using your example of a $5K job. Where would I input the $1k material? Or should I initially put that I only made $4k so that is all I will be taxed on? Thank you in advance for your assistance.