2. Bill of Material (BOM) Example - Costbucket

2. Bill of Material (BOM) Example

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Bill of material is the list of input raw material by quantity for making or assembling a saleable product. Similar to a recipe for baking, it acts as a budgetary guide and any increase in the price of the raw material or quantity used is a variance or delta to the budget. You will see price variance and quantity variance highlighted on the profit or loss statement of your business in Costbucket.

Example
Meals category = Finished Goods.
Product A created as a meal. The sales prices of product A is $20 and the cost is $5 each (inventory purchased)
Product B created as a meal. The sales prices of product A is $15 an cost is $3 each (inventory purchased)
Product C created as a combination of Product A (3 units) and Product B (2 units) with a sales price of $85.
Product C item type setup as an assembled item.
If you attempt to add a cost for Product C, you will be restricted because the cost is determined by the value of the input items.

Product C cost modification restriction.

Select Bill of Material (BOM)

Search for the Assembled item Product C.

Select the Product then add the components to make the product.

Component Code = The inventory item used to make the item.
Location = The location to withdraw the inventory from. You can use Default if unknown.
Work Center = Default
Quantity = number of units of measurement of the product to use to make the item.
Effective from = start date to make the product.
Effective to = end date to make the product.