I would probably approach this a bit differently from the others.
Cost of goods sold should include.
Labor, materials, advertising (website), trips to shows, etc.
But rather than charging by the square inch or by the unit, I would weigh my leather and my dyes when I first get them. Then divide that by the $$ paid (including shipping) and then after each cut or dye job I would weight them again.
Then make the units and such in your spreadsheets. Debiting and Crediting as new inventory comes in and leaves as finished goods.
I highly recommend that you take a bookkeeping class or a first year accounting class.