The bill of material (BOM) lists the materials required to manufacture a particular product. A BOM can include materials that have their own BOMs. The BOM determines which materials are costed, and the sequence in which they are costed. The system selects a BOM for the material through the costing variant and its quantity structure determination ID.

The following graphic shows the integration between the BOM, the material master record, the valuation variant and the cost estimate, and shows how material costs are calculated.

For more information about how costs (material and production costs) are calculated, see the following:

For more information about bills of material, see the SAP Library under the following: