No error when saving sales order with missing costs

When we create a sales order for a material for which no cost has been determined, we do not get an error or any sort of prompt that one of the items in the order does not have a standard cost when the order is saved. When the order is costed, there is also no error, the system appears to be rolling up the costs of the sub-components rather than requiring there be a cost on the material variant itself.

We are using material variant configuration.

Our costing variant is set to with a valuation variant with strategy sequence "Standard Price" and "Standard Price 1" Based on this, I would think the system would require a standard price on all materials before it would allow a sales order to be costed.

As a test, we created material variant MV-T7-TEST. This material has never been costed and has no costs in the material master.

We create a sales order with this material variant in it, and it shows costs. We can save the order with no errors or warnings.

I am assuming the order is getting those costs from the standard costs of the components of the MV-T7-TEST even though there is no standard cost on the material in the material master.

When I go into the same order with VA02 and cost it, I again don't get an error, even though there is no cost on that material in the material master.

Why is the system doing this? Where is the configuration that controls which cost (BOM or standard cost from Material Master) is used in sales order costing?

Thanks much,

Andrea