How to: Calculate the Standard Cost of Assembly BOMs

You calculate the unit cost of an assembly item by rolling up the unit cost of each component and resource in the item’s assembly BOM. For more information, see How to: Create Assembly BOMs.

The unit cost of an assembly BOM always equals the total of the unit costs of its components, items, and any resources.

To calculate the unit cost of an assembly BOM, the parent item and its component items must use the Standard costing method. Any resources in the assembly BOM are rolled up if they have a unit cost that is defined on the resource card.

The standard costing method is typically used for items that go through processing steps, such as assembly and manufacturing. Managing the standard cost of manufacturing items is more complex because of capacity costs. For more information, see About Calculating Standard Cost.

To calculate the standard cost of assembly BOMs

  1. In the Search box, enter Items, and then choose the related link.

  2. Open the item card of the new assembly BOM that you have created.

  3. On the Navigate tab, in the Assembly/Production group, choose the Assembly button, and then choose Calc. Standard Cost. Select one of the following options.

    Option Description

    Top Level

    Calculates the assembly item's standard cost as the total cost of all purchased or assembled items on that assembly BOM regardless of any underlying assembly BOMs.

    All Levels

    Calculates the assembly's item standard cost as the sum of:

    • The calculated cost of all underlying assembly BOMs on the assembly BOM.

    • The cost of all purchased items on the assembly BOM.

    If the assembly BOM that you are calculating does not have an assembly BOM or assembly BOMs within it, then you do not see the option to select the level to base the calculation on.

The costs of the items that make up the assembly BOM are copied from the component item cards. The cost of each item is multiplied by the quantity, and the total cost is shown in the Standard Cost field on the assembly item card. Because the Costing Method field is set to Standard, the Unit Cost field on the item card is also updated.

See Also