This free BOM cost calculator turns five inputs into the bill of materials cost per finished unit, broken down into material, labour and overhead with a suggested selling price. Enter your total raw material cost, direct labour, overhead percentage, scrap allowance and target margin, and read your manufacturing cost per unit instantly. No sign-up, results update as you type.
How to calculate BOM cost
BOM cost is built up in layers, each stacking on the one before it:
- Material with scrap =
raw material × (1 + scrap% ÷ 100)— the material you actually consume, including the bit lost as scrap. - Base cost =
material with scrap + direct labour— the direct cost of making one unit before overhead. - Overhead =
base cost × overhead% ÷ 100— indirect costs (power, depreciation, supervision) applied as a percentage. - Total unit cost =
base cost + overhead— the full cost to produce one finished unit. - Selling price =
total unit cost × (1 + margin% ÷ 100), and profit =selling price − total unit cost.
Worked example
Worked example. A product uses ₹800 of raw material with a 3% scrap allowance, ₹150 of direct labour, 15% overhead and a 20% margin:
- Material incl. scrap = 800 × 1.03 = ₹824
- Base cost = 824 + 150 = ₹974
- Overhead = 974 × 15% = ₹146.10
- Total unit cost = 974 + 146.10 ≈ ₹1,120.10
- Selling price = 1,120.10 × 1.20 ≈ ₹1,344.12
- Profit per unit = 1,344.12 − 1,120.10 ≈ ₹224
So this product costs about ₹1,120 to produce and, at a 20% margin, would be priced near ₹1,344 — leaving roughly ₹224 of profit per unit before selling and distribution costs.
What goes into a BOM cost?
A bill of materials cost is made up of five components. The first four build the cost to produce; the fifth turns that cost into a price:
| Component | What it covers | How it is applied |
|---|---|---|
| Raw material | Every component, sub-part and consumable in the product | Summed per finished unit |
| Direct labour | Assembly, machining and finishing labour | Added per unit |
| Overhead | Power, depreciation, supervision, indirect costs | % of material + labour |
| Scrap / wastage | Material lost in cutting, moulding or rejects | % uplift on material |
| Profit margin | Your markup on cost to reach a selling price | % on total unit cost |
Material and labour are the variable core; overhead and scrap are allowances tuned to your process; margin is the commercial decision that converts cost into price.
Single-level vs multi-level BOM costing
This calculator gives a single-level estimate — it treats the product as one flat list of material, labour and overhead. That is fine for simple parts, but most manufactured products are built from sub-assemblies that are themselves produced, each with its own BOM and its own cost.
A multi-level BOM rolls the cost of every sub-assembly up into its parent automatically, level by level, so the final product cost reflects the true cost of each intermediate component as material and labour rates change. For anything more complex than a single part, multi-level costing is far more accurate — and far too tedious to maintain by hand in a spreadsheet. See how OEMup handles multi-level BOM and end-to-end BOM management.
From a spreadsheet to live BOM costing in OEMup
A calculator answers one product, once. Running a plant means costing dozens of products, each with shifting material rates and shared sub-assemblies — and the spreadsheet version drifts the moment a vendor price changes and nobody updates the parent. Inside OEMup ERP, BOM costing is live: material rates flow from purchase prices, labour and overhead rates are set once, sub-assembly costs roll up through every level automatically, and your unit cost and suggested price update by themselves. Start free or explore the full production & BOM features to see costing handled end to end.
BOM Cost Calculator — frequently asked questions
How is BOM cost calculated?
BOM cost is layered: material with scrap = raw material × (1 + scrap% / 100); base cost = material with scrap + labour; overhead = base cost × overhead% / 100; total unit cost = base cost + overhead. The suggested price applies your margin: price = total unit cost × (1 + margin% / 100). For example, ₹800 material + 3% scrap = ₹824, + ₹150 labour = ₹974, + 15% overhead = about ₹1,120.10, and at a 20% margin the price is about ₹1,344.12.
What is included in a bill of materials cost?
Five components: raw material (every part and consumable), direct labour, manufacturing overhead (applied as a percentage), a scrap or wastage allowance, and the profit margin you add to reach a price. The first four make up the cost to produce one unit; the margin converts that cost into a selling price.
What is the difference between single-level and multi-level BOM cost?
A single-level BOM treats the product as one flat list, which is what this calculator estimates. A multi-level BOM has sub-assemblies that are themselves manufactured, each with their own BOM, and rolls their cost up into the parent automatically, level by level — far more accurate for products built from manufactured sub-assemblies.
How do I price a product from its BOM cost?
Apply a profit margin on top of the total unit cost: selling price = total unit cost × (1 + margin% / 100). For example, a total unit cost of ₹1,120.10 at a 20% margin gives a price of about ₹1,344.12, leaving roughly ₹224 profit per unit. Pick the margin from your market position and re-check it whenever material or labour costs move.
Need another shop-floor tool? Try our free calculator library or the Production Cost Calculator.
Stop re-keying BOM costs in spreadsheets
OEMup keeps live multi-level BOMs — material, labour and overhead roll up through every sub-assembly automatically, with unit cost and price that update by themselves. Built for Indian manufacturing SMEs.
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