The materials price isn't indicative of cost unless you know what assembly, shipping, replacements, 3rd party retail margins, R&D etc costs. Given Apple have designed their own chips since the A5 (with the A4 optimised by Intrinsity and Samsung, the former acquired by Apple) and their own GPUs since 2017 I'd say the R&D cost isn't trivial. Unlike manufacturers like Samsung etc, they make their own OS top to toe.

I think it's more useful to look at their financials as the iPhone is their highest grossing product, with guidance of a ~35-40% margin.

Tim Cook says he's never read a bill of materials that was anywhere close to accurate. I believe it- the last time I got an iPhone replaced, I asked what they were doing with the old unit and the person said they were probably going to reuse the touch id sensor since that was one of the most valuable parts.

Besides even other costs like r&d, marketing, and the retail margin, buyers are getting more than hardware - how much is the cost of OS development and the included apps?

Wow... just materials? That much? Honestly I think even better of Apple, considering what they must invest beyond materials in each phone.

Excluding Shipping, Marketing, R&D, Operation Cost, and the recent most expensive and inflated one, Patents.

Does that include labor, shipping, design work, getting the fab set up, programming, etc.?

Because they sell things for a higher price than it costs to make them?