Lessons · Engineering · costing a bill of materials
Costing a bill of materials
A bill of materials, the BOM, is the list of every part a job needs. Each line is quantity times unit price; the material cost is the sum; labour and overhead are added on top.
Hone is a place to practise a career, one idea a day. This is one of its lessons, written out in full and free to read without an account.
In beta. This lesson was written for Hone and has not yet been checked by a licensed engineer. Practice material, not professional advice. What that means.
What it is for
The quote went out at $577 and the parts alone came to $640, because one line had a reel price where a per-metre price belonged. The BOM is where a job is won or lost before it starts, and every line is one multiplication.
How to think about it
Line by line: quantity in the same unit as the price, times the price. Add the lines. Then labour as hours times rate, then overhead or margin as a percentage of the total so far. Write each stage down.
Worked example
Cost = Σ (quantity × unit price), then the extrasThe shape of every BOM.
2 motors at $145.00 = $290.00; 6 m of cable at $3.25/m = $19.50; 1 enclosure at $88.00Three lines. Each is quantity times price, in matching units.
Material = 290.00 + 19.50 + 88.00 = $397.50The parts total.
Labour 3 h at $60/h = $180.00; total = $577.50; with 20 % margin = $693.00Labour on top, then margin on the whole.
Your turn
12 bolts at $0.80 and 4 brackets at $6.50. Write the material cost.
Cost = 12 × 0.80 + 4 × = $35.60
Solve one, graded on the server
The trap
Pricing cable per reel and counting it per metre. Quantity and unit price have to be in the same unit, and a BOM is where that mistake hides in the third decimal of a quantity column.