Creating a Bill of Materials for a Manufactured Variant and accounting for Labor and Wastage

Bill of Materials (BOM) - refers to a list of all components needed to produce a product. These components can be intermediate materials, subassemblies, parts, and consumables. You may also add other costs such as labor and overheads.

Let’s discuss how to create BOM for an existing variant.

Creating Bill of Materials for existing variants.

1. From the Manufacturing tab, go to Bill of Materials, click “Create New” then select BOM for an existing variant.


2. To create a Bill of Materials for an existing variant, select the finished variant that you will be creating the BOM for. You can only select Manufactured Variants on this dropdown. You will not be able to create BOM for Purchased Variants.


3. The “Yield Quantity” refers to the number of finished products that can be produced based on the quantity of the components you have set. This is set to “1” by default. Select the finished variant and add the yield quantity. Once done, add the respective quantity of each component required to create the finished product. On the right side of the BOM window, you will be able to input the BOM’s Reference number.


The component section on your Bill of Materials will contain the following columns:

QTY - refers to the quantity of components that will be used.
Wastage - refers to component materials that will not be converted 100% into a finished product.
Cost Per Unit - refers to your Moving Average Cost.
Total Cost - refers to the total expected cost of the product based on the BOM.

NOTE: You can add the estimated Wastage in your Bill of Materials. The actual accounting of Wastage, however, will be done on your Production Order. Your Production Order will deduct the "Allocated Quantity" from your Inventory. The "Allocated Quantity" comprises of Consumed, Unconsumed, and Wastage quantity.

4. Aside from the Components, you may add other costs such as labor and additional miscellaneous expenses that may be part of the production process. There is also a “Notes” section that you can use if you have other instructions or references that you wish to document and add to the BOM.

image4.png5. Once all information has been added to your BOM, click Save to set the BOM as Active. Note that you can only edit your Bill of Materials if it has no Production Order attached to it. Once the Bill of Materials has been created, you can then start creating the Production Order.


  • You cannot create Bill of Materials for Purchased Variants.
  • You can use “Import via CSV” button if you have a lot of components to be added on the Bill of Materials.
  • Once the Bill of Materials has been created, you can view it from the Bill of Materials tab or by going to the Manufactured Variant’s detail page then click on “View Bill of Materials.”

You have now completed creating your Bill of Materials! You may now proceed with creating the Production Order and start manufacturing.

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