About the Bill of Materials Cost Calculator
A bill of materials (BOM) lists every component, sub-assembly and raw material needed to make one finished product. This calculator rolls up a multi-level BOM: it multiplies each component’s quantity by the quantities of all its parent assemblies, adds a scrap or yield allowance, prices each line, and sums everything into a material cost per finished unit. Add direct labour and an overhead rate to get a full standard cost, and a batch quantity to see the cost of a production run.
Enter one line per BOM item as "level, part name, quantity per parent, unit cost, scrap %". Level 1 items go directly into the finished product, level 2 items go into the level-1 item above them, and so on — the same indented structure you see in an ERP or spreadsheet BOM. The unit cost on an assembly line is the cost added at that level (for example assembly labour), not the total of its children, so nothing is double counted.
It is useful for product managers, manufacturing engineers, cost accountants and makers pricing a new product, comparing a design change or checking a supplier quote. The table shows extended quantities and costs for every line, and the chart shows which top-level branch drives the cost.
With the default inputs, the total cost per unit is $35.49. Change any value above to recalculate instantly.
How to use the bill of materials cost calculator
- 1List each BOM item on its own line with its level number.
- 2Enter the quantity per parent, the unit cost and any scrap percentage.
- 3Put assembly labour or processing cost on the assembly line itself, not on its children.
- 4Add direct labour per unit and your overhead rate.
- 5Enter a batch size, then review the unit cost and the extended BOM table.
Formula and method
Each BOM line’s extended quantity is the quantity per parent multiplied by its scrap factor (1 + scrap %) and by the extended quantity of its parent, so a component used 4 times in an assembly that is used twice per product counts 8 times. Scrap on a parent assembly therefore carries down to its children, the way MRP systems inflate requirements. Extended cost is extended quantity × unit cost, and material cost is the sum of all lines.
The scrap allowance cost is the difference between material cost with and without scrap factors. Direct labour per finished unit is added, and overhead is applied as a percentage of material plus labour. Multiplying by the batch quantity gives the production run cost. Costs on assembly lines are treated as value added at that level, not as the sum of their children.
- qty
- Quantity of the item per one parent
- scrap%
- Expected scrap or yield loss for the item
- Labour
- Direct labour cost per finished unit
- overhead%
- Overhead applied on material + labour
Worked examples
Desk lamp with three levels of structure
The base assembly adds $2.50 plus a steel plate at $3.20 × 1.02 = $3.264, two weights at $1.70 and four screws at $0.05 × 4 × 1.05 = $0.21. The arm adds $1.80, two tubes at $2.884 and two springs at $0.60, and the four top-level purchased parts add $10.62. Materials total $23.58 (including $0.28 of scrap), labour $6 and 20% overhead $5.92, for $35.49 per lamp.
Scrap on a sub-assembly flows down to its parts
Two frames with 10% scrap need 2.2 frames ($11.00), and each frame takes 3 brackets, so 6.6 brackets ($6.60). Fabric is 1.5 × 1.05 = 1.575 m at $8 ($12.60). Materials are $30.20, of which $2.20 is scrap; adding $4 labour and 15% overhead gives $39.33 per unit.
Frequently asked questions
What is a BOM cost rollup?+
A cost rollup multiplies each component’s cost by how many are needed per finished product — through every level of sub-assemblies — and sums them. ERP systems run it to set standard costs; this calculator does the same from a pasted indented BOM.
What is the difference between a single-level and multi-level BOM?+
A single-level BOM lists only the direct components of one item. A multi-level (indented) BOM shows sub-assemblies and their own components beneath them, so quantities must be multiplied through each level to find total requirements per finished product.
How do I include scrap in a BOM?+
Add a scrap or yield-loss percentage to each line. A 5% scrap factor means you plan 1.05 units for every unit that ends up in the product. Scrap on an assembly increases the requirements for every component below it.
Should labour and overhead be in the BOM cost?+
Material cost alone understates product cost. A full standard cost adds direct labour (often from a routing) and manufacturing overhead. Here you can put assembly labour on individual assembly lines, or enter a single labour figure per unit plus an overhead rate.
Why is my BOM cost different from my accounting COGS?+
BOM costs are standards based on planned quantities and prices. Actual COGS also reflects purchase price variances, actual scrap, rework, freight-in, inventory adjustments and how overhead is absorbed, so the two rarely match exactly.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.