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BOM (Bill of Material)

A bill of material (BOM) is a list of all components required to manufacture an end product. It is used to calculate standard costs by aggregating raw material and component costs. In SAP, BOMs can be created for production or as universal BOMs using transaction codes CS01 and OS24. Components, quantities, and other details are added to define how the finished product is made. The BOM is then used to estimate standard costs for the finished material.

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Atul Madhusudan
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65 views5 pages

BOM (Bill of Material)

A bill of material (BOM) is a list of all components required to manufacture an end product. It is used to calculate standard costs by aggregating raw material and component costs. In SAP, BOMs can be created for production or as universal BOMs using transaction codes CS01 and OS24. Components, quantities, and other details are added to define how the finished product is made. The BOM is then used to estimate standard costs for the finished material.

Uploaded by

Atul Madhusudan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BOM (Bill of material)

Bill of material is a formally structured list of components that make up a product. BOM is used in
standard cost calculation for finished product by rolling up cost from raw material to semi-finished
product and then finished product.

We created BOM through T-code CS01:

Now let us take one finished product 0273.600.018-1MC for plant 369W now this is a finished
product:

Now we shall create a BOM component for this material in T-code OS24 we can define which
material type will be created as BOM:
When creating BOM if we use BOM usage 1 “Production BOM’ then it can only be used for
production Orders and costing of material:

And if we use BOM usage as universal BOM then we can use this BOM for both Sale order BOM and
production BOM

We shall create a Universal BOM, the header is a finished product and the BOM must be created with
item category ‘L’ (Stock Item):
Now input the component i.e. is raw material used to make the finished product. Let us take material
8905.707.966-01 which is a raw material

Press enter: add the number of Quantity, this tell you how much quantity of this raw material is
required to make this finished product

Press enter and save then the BOM is created. You can vie BOM through T-code CS03:

Now when you run the standard cost estimate for material 0273.600.018-1MC you will see that the
BOM 01269519 is getting picked same as the one we created:
BOM 01269519:

Standard Cost Estimate for material 0273.600.018-1MC:


Now one of the most important indicator for calculating the standard cost estimate is that the
material should be a finished product, it should have a standard price and also it should be an in-
house production in MRP 2 tab where the procurement type must have indicator ‘E’.

Also if in the Costing 1 table the quantity structure is ticket then it will have a BOM and Routing. If it
is not ticket then there is no BOM and Routing. Also if the ‘Do Not Cost’ Checkbox is ticked then the
material will not be considered for costing:

We can view the BOM in table MAST:

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