Bill of Materials Costing: Multi-Level BOMs, Scrap Factors, Routings, Overhead Rates & Product Cost Roll-Ups
Work out what a manufactured product really costs. You will explode a multi-level bill of materials, add scrap, labour and machine time from the routing, apply overhead rates, roll costs up level by level and see how a single price change flows through, with every cell checked as you go.
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About this course
In this course you cost a fictional garden bench the way a cost accountant does. You price a single-level bill of materials with SUMPRODUCT, then explode a three-level BOM into extended quantities with XLOOKUP on the parent and total each raw material with SUMIFS. You gross up net quantities for scrap and combine process yields, turn a routing into labour cost per unit with setup spread over the batch, and apply machine-hour and labour-hour overhead rates against a plant-wide rate. You roll costs up level by level, trace a supplier price increase through a where-used list to new margins, and decide make or buy with relevant costs and a cost chart.
Lessons
- The Single-Level BOM: Quantity × Unit Cost = Material per Unit Pro
- Multi-Level BOMs: Parents, Children and Extended Quantities Pro
- Scrap Factors and Yield: From Net to Gross Quantities Pro
- Routings: Operation Times, Labour Rates and Setup Spread over the Batch Pro
- Overhead Rates: Machine Hours, Labour Hours and Applied Overhead Pro
- The Cost Roll-Up: Parts into Assemblies, Assemblies into the Product Pro
- Price-Change Impact: Where-Used Lists, New Costs and Margins Pro
- Make or Buy a Sub-Assembly, and the Cost Structure Chart Pro