Understanding Product Costing for a Percent Bill of Material

In either process or discrete manufacturing environments, you use a percent bill of material to express the parts or ingredients as a percentage of the parent quantity.

If you use percent bills of material, the system calculates costs based on the quantities that are specified in the percent bill. Quantities are expressed in percentages (such as 75 for 75 percent), and the total of the component quantities must equal 100. Components must have a unit of measure that can convert to the parent unit of measure without causing rounding errors. For bills of material with a zero batch quantity, the cost rollup calculates the cost for one primary unit of measure for the parent product.

Note: You must have a multidecimal environment to use percent bills.