Multilevel BOMs in Production Orders 
A multilevel BOM contains one or more child items that are themselves BOMs containing their own child items. When a child BOM item is included in a production order, the BOM type determines whether it is treated as an inventory or non-inventory item:
When a component of a production BOM is a production type BOM, the BOM is overlooked in the production order, since it is an inventory item, which has real inventory and value. If required, you must issue a production order for the parent item of each BOM.
When a component of a production BOM is an assembly type BOM, the BOM is overlooked in the production order, since it is a non-inventory item and is treated as such. It does not create an inventory posting, and its cost is debited from an expense account.
If the assembly BOM is also defined as a phantom item, it is replaced with its components when added to the production order. The components are handled in the production order according to their type.