Before starting to manufacture products we need to make sure that we have Bill of Materials (BOM) specified for such products.
To attach BOM to a product we need to tick the checkmark "Bill of Materials" (on the Product View screen. More details on creating a new product are here: http://dearsystems.freshdesk.com/support/solutions/articles/1000134484). After it's checked the "Bill of Materials" tab appears where were can specify the components for production.
Auto-assembly/Kit - when this checkmark is applied the products are produced automatically after the sale order for the final product is authorised assuming there are enough components in stock.
Auto-disassembly - when this checkmark is applied the products are disassembled automatically after the purchase order for them is completed.
Please note: Only FIFO, FIFO-Batch and Special-Batch costing methods support auto-assembly/disassembly.
Quantity to produce: Enter the yield for the BOM below.
Assembly Instruction URL: Enter if applicable
Cost is estimated using: Average Cost / Latest Purchase Cost / Fixed Purchase Cost: Please note - this is for your reference only. Total cost in BOM is an estimate only. The actual cost of finished goods will be calculated using the costing method of each individual component and can vary from "Total" cost displayed in the BOM.
To add Components - click "Component" button and select the inventory item you would like to add as to The BOM. Enter in the quantity of the components required to produce the number of products specified in "Quantity to produce" field, Wastage % OR Wastage Quantity and Disassembly Cost % is applicable.
Use of disassembly cost %. By default DEAR splits the cost of the parent product equally between product lines in disassembly. However you can set rules on how DEAR needs to distribute the cost of the parent product among the components. The total must equal 100%.
For example a product A is disassembled into 2 x Product X and 1 x Product Y.
If product A has $100 cost DEAR will set $50 for Product X line which will be split among 2 items giving the cost of $25 per each and $50 for Product Y.
Suppose that you wish to set your own rules. You estimate that the cost of the product Y will be $80 and the cost of the product X will be $10 each. Your disassembly cost percentage will be 20% for the first line (product X) and 80% for the second line (product Y).
To add non-inventory items ("Service" Type products) use Labour & Overheads section. To add such expenses click "Labour & Overhead" button and select the service items you would like to add to the BOM. Add Quantity, Expense Account used to accumulate these expenditures and Price Tier used as a cost basis. If you do not have a standard rate for the Expense you can always enter in actual amount during production.