What is Bill of Material?
The bill of material summarizes the relationships between the different items used in the manufacturing of the finished good defined in the routing. It contains the cost rollup information, including the materials, outside processing, and fixed and variable manufacturing cost. The bill consists of a parent item and component items that make up the parent. If the Standard Routing check box is selected, this routing version is used to update the Inventory Management Item file with the standard cost calculated from the Bill of Material Cost Rollup. You can only designate one routing version to update an item/warehouse standard cost where you can produce an item by multiple routings.
Click the BOM button from the Header tab of the Maintain Routing window to open the BOM Inquiry window, which displays information in a tree format (no changes can be made on this window).
Use the BOM Cost Rollup Journal task to process BOM cost rollup adjustments. This process prints the BOM Cost Report and Inventory Adjustment Journal, and performs a General Ledger update for cost change based on quantity on hand (if the item is flagged as a standard cost item) and updates the Inventory Management item/warehouse record with the news standard cost. This is done by recalculating the cost of all components assigned to the parent bill regardless of the number of levels involved. The cost includes scrap and yield percentages. Open this window by selecting Bill of Material/Cost Rollup Journal from the Activities menu. After Bill of Material/Cost Rollup Journal is posted and if the item is designated as a Standard Cost Item, the standard cost in the item/ warehouse record is used to cost Inventory Management transactions. If the item is designated as Average Cost, Actual Cost, LIFO Cost, or FIFO Cost, this field is used for information purposes only.