The particular lack of clarity that you are seeking to have clarified is not something one figures out through osmosis, when you don't have a full understanding of just how the math works. This lack of understanding is also exacerbated by reading to much into the information or question. So your experience is nothing new.
Basically, anything that permanently leaves the store once it's paid for, is reported somewhere in the inventory section. Regardless of where you enter the expense in that section,it gets deducted from your gross business income (with the exception of "inventory removed for personal use")
Additionally, if you have already reported the expense elsewhere in the program (such as claiming your boxes and bubble wrap as "supplies") then you can not claim it again in any other section. So just be aware of and understand that.
Cost of Purchases: What you paid for the product you actually sold during the tax year. This would include oils, butters, fragrances, etc. and "could" include the jars, bottles and labels if the cost of these items can be broken down into the same units for each sale.
For example, if you sell your product at a fixed cost for each 10oz bottle, that 10oz has a fixed (somewhat) cost, the 10oz bottle or jar has a fixed cost, and the labeling on that jar or bottle has a fixed cost. (fixed cost to you, that is) So if you add up those fixed costs for one unit, it comes to $5 per unit. So if you ship out 12 jars, that's $60. If you ship out 6 jars then obviously it's $30. In this scenario, this would be what I would clarify as "the product actually sold"
Labor Cost: Most likely, you would have $0 here. If you have employees, your labor costs are already taken care of in the section where you deal with the employee wages that you pay.
Materials and Supplies: This generally is used for those things that are not a part of the finished product, but are "consumed" in the manufacturing, shipping, and/or selling process. I don't see that you have anything that is consumed during the manufacturing process. But only you would know that for sure. As an example, if you manufacture mirrors, one thing you're going to do somewhere in the process, is clean that mirror with Windex; probably just before putting it in the shipping box. The cost of that Windex is a "materials and supplies" cost, because it's not part of the product being sold, and it's an undeniable fact that it is "consumed" during your manufacturing/shipping/selling process.
Other Costs to prepare for sales: This would include everything else, such as boxes, bubble wrap, address labels, and even postage. Anything that is not "a material part of" the actual product being sold, yet is utilized in the process of selling it, or preparing it for sale.
In the end, regardless of where you enter a valid expense in any of the above categories, the math is the same. It gets subtracted from your gross business income and is not included in the taxable business income. That's all the IRS cares about. When they have to process more than 400,000,000 returns every year, and do it in less than 90 days every year, it's not like they have the time to get nit-picky on everything.
