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What is BOM? Steps Needed. How is it Related to Product Costing

Gurus,

What is BOM?

How is it related to Product Costing and Profitability Analysis and CO?

Technical help and steps would be appreciated.

Thanks.

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    author's profile photo Former Member
    Former Member
    Posted on Jun 05, 2008 at 10:03 AM

    Hi,

    BOM (Bill of Material) is a structured list of components (with the object number, quantity and unit of measure) that go into making of a product or an assembly.

    Bill of Material can be simple or complex depending upon the structure of the product. And, a collection of BOMs that lets you describe a product or a number of similar products is known as BOM Group.

    T code is CK51.

    In product costing BOM is used to estimate the cost incurred for the creation of a finished product.

    Technically, when u do a product cost run for particular material and if you don't have BOM for the material, the system will give an error.

    If useful, assign points.

    Regards,

    Manju

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 05, 2008 at 07:22 AM

    hi,

    BOM bill of material.....For a material i.e example..take a pen

    for pen we need refill and cap and bottom ...and all these are BOMS.

    and when u do a product cost run for particular material...cost incurred in creation a finshed product i.e for a pen refil cost and cap cost and bottom cost all this cost will be estimated in product cost run..

    after product cost run the standard price will be updated in material master.....

    so when u are doing product cost run if u dont have bom for the material system throughs an error...

    if useful assign points...

    regartds,

    santosh kumar

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 05, 2008 at 08:36 AM

    Hi Bathia,

    In order to consider a finish product cost, you'll have to consider the BOM (CS03) ( which is the list of its components ) and the Routing (CA03) which indicates the "recipe" ( time of labor, energy, ... ).

    Hope this helps,

    Erwan

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 05, 2008 at 09:03 AM

    Hi,

    Bill of materials (BOM) is the term used to describe the "parts list" of components needed to complete a saleable end-item. T.Code CK51

    A bill of material can define products as they are designed (Engineering Bill of Material), as they are ordered (Sales BOM), as they are built (Manufacturing bill of material), or as they are maintained (Service BOM).

    When one will be knowing that following material,labour, overheads are required to manufactuer a particular product, then certainly it helps in product costing.

    .... Assign points,if helpful

    Regards,

    Saurabh

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 05, 2008 at 09:22 AM

    Hi,

    BOM is nothing but a structured list of components that go into making a product.

    Depending upon the industry it can be called as a recipes or list of ingredients.

    Use T Code CK 51

    There are two technical types of BOM

    Variant BOM and Material BOM.

    BOM is use ful in product costing as with the help of BOM you will get to know the expenses incurred at each level of production.

    Regards,

    Nitin Aggarwal

    Please assign points if helpful.

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