You will need to determine what portion of the materials were used for business and which were used for hobbies.
For example, if you bought 4 sheets of luan board for $120, 20 2 x 4's at $75 and a bucket of screws for $40 and you built 4 items that were all the same, gave one to your brother as a gift and sold the other 3 in your daughters store, you would take $235 (120+75+40) and divide it by 4 ($58.75) then multiply it by 3 ($176.25) for the ones sold in the store. You would then use $176.25 for the cost of goods sold.
Basically, you will need to allocate the materials to the project and deduct accordingly.
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