Manufacturing Cost Calculation

Manufacturing Cost Calculation

Let’s break down how this multi-level (nested) BOM structure would work in CushionsERP’s native setup, and how you can track the cost for each level — component and final product.

🧩 Your Structure: Multi-Level BOM

Madrid Sofa (FG)
- Mattress Cushion (Sub-Assembly)
  - [BOM: Foam, Fabric, Zipper…]
- Back Cushion (Sub-Assembly)
  - [BOM: Foam, Fabric…]
- Pillows (Sub-Assembly)
  - [BOM: Stuffing, Cover…]
- Raincover (Sub-Assembly)
  - [BOM: Waterproof Fabric, Zip…]

Each component is:

A product in CushionsERP (typically “manufactured” type)
Has its own BOM
Can be produced via its own Manufacturing Order

Then the final product (Madrid Sofa) has:

A BOM that includes these 4 sub-assemblies as its inputs
Possibly no raw materials directly — only components

✅ How CushionsERP Handles This

1. Create Each Sub-Component with BOM

Go to: 'Products > New Product'
- Name: “Mattress Cushion”, type: Manufactured
Then: 'Manufacturing > BOMs > New BOM'
- Add raw materials for this component
- Save and validate

✅ Do this for all 4 sub-components

2. Create BOM for Madrid Sofa

Go to: 'Products > New Product'
- Name: “Madrid Sofa”, type: Manufactured
Add BOM:
- Line 1: Mattress Cushion (Qty: 1)
- Line 2: Back Cushion (Qty: 1)
- Line 3: Pillows (Qty: 2?)
- Line 4: Raincover (Qty: 1)

✅ This is your top-level BOM

3. Manufacture Each Sub-Component

Use a Manufacturing Order to build each component
CushionsERP will calculate:
- Cost based on the raw materials used
- Output as stock of that component

✅ Result: “Mattress Cushion” now exists in stock at calculated cost

4. Manufacture Madrid Sofa

When all 4 components are ready
Use MO to manufacture “Madrid Sofa”
The cost will be:
- Sum of 4 components’ stock value
- Plus any additional manual cost lines (labor, etc.)

✅ Now you have full cost rolled up to final product

📊 Where You See the Cost

Item	Where to View It in UI
Component cost	Inside its MO or product card
Madrid Sofa total cost	In its MO (after manufacturing)
Stock valuation (by unit)	In Products > Stock tab
BOM cost estimation	In BOM detail view (before MO)

✅ Benefits of This Setup

Cost roll-up is native: sub-assembly → final product
Accurate costing per MO
You can manufacture components in batches and reuse them
You can reuse components across different finished goods

🔧 Optional Enhancements

Goal	Method
Auto-trigger sub-component MOs	Custom script or planning manually
View cost summary per Sofa	Export MO data or use CushionsERP Reporting modules
Overhead allocation	Add services/labor to each MO manually
MO dashboard	Use Manufacturing widgets or external dashboards

🧠 Conclusion

Yes — CushionsERP supports your nested BOM model very well, and it calculates cost at each level accurately, as long as:

You manufacture each level as its own MO
You configure product types and BOMs correctly

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