If you produce finished goods, such as concrete and asphalt, you will need to set up a bill of materials for each finished good you produce.

A bill of materials identifies all of raw materials (components) that are needed to produce one unit of the finished good, along with the quantities needed of each material. When you "produce" a unit of a finished good, the system uses the bill of materials to determine how much of each raw material to relieve from inventory. Additionally, if you selected the Update Average Cost of Material with Sum of Component Costs checkbox for the finished good in the IN Location Materials form, the system also updates the material's average unit cost with the sum of the component costs.

Set up bills of materials by location group and finished material using the IN Bill of Materials form. The information set up for a bill of materials serves as the default for all locations within the group. For instructions, see Set up a Bill of Materials.