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Schedule C attempts to be a "single catch-all" form for small/home business. At least thats the simplified way I look at it. If you were in a retail business, then this is where you would apply wholesale cost of items sold. IMHO, in your situation, I would ignore any input on this line. You are producing, manufacturing a product from raw materials purchased, the expenses. Receipts and expenses should be all that is necessary.
Possibly, you could place all your expenses in the cost of goods line and deduct from receipts, don't see why not. I was advised in the early 90s when I first started using Schedule C, be consistent and have your documentation.

Good question, as I may be selling paintings in the future, I know smarter Fools hang out here and I await a more informative response.
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