Articles | Updated 29 October 2026
What Is a BOM? Bills of Materials and Costing a Product per Unit
BOM stands for Bill of Materials. It is the production recipe that says what materials one batch needs, how much of each, and how many units it yields. Once you know the BOM, you can cost each unit accurately, see whether you have enough materials, and take materials out of stock exactly as used.
What must a BOM include?
A small factory's BOM does not need to be complex, as long as it has these 5 parts.
Finished good
Meaning: The product you make and sell
Example: Roasted chilli paste, 200 g jar
Materials and quantities
Meaning: What one production batch uses
Example: 2 kg dried chillies, 3 kg shallots
Yield per batch
Meaning: How many units one batch makes
Example: 40 jars
Labour and overhead
Meaning: Costs that are not materials, such as labour, gas and electricity
Example: 400 baht labour and 200 baht overhead per batch
Recipe version
Meaning: The recipe in use now, plus the history of older ones
Example: Reduced the sugar in the recipe last month
| The | Meaning | Example |
|---|---|---|
| Finished good | The product you make and sell | Roasted chilli paste, 200 g jar |
| Materials and quantities | What one production batch uses | 2 kg dried chillies, 3 kg shallots |
| Yield per batch | How many units one batch makes | 40 jars |
| Labour and overhead | Costs that are not materials, such as labour, gas and electricity | 400 baht labour and 200 baht overhead per batch |
| Recipe version | The recipe in use now, plus the history of older ones | Reduced the sugar in the recipe last month |
Example: costing roasted chilli paste per jar
Say one batch of roasted chilli paste makes 40 jars and uses the materials and costs in this table.
Dried chillies
Quantity: 2 kg
Unit price: 320
Total (baht): 640
Shallots
Quantity: 3 kg
Unit price: 120
Total (baht): 360
Garlic
Quantity: 2 kg
Unit price: 160
Total (baht): 320
Coconut sugar
Quantity: 2 kg
Unit price: 60
Total (baht): 120
200 g glass jars
Quantity: 40 jars
Unit price: 8
Total (baht): 320
Labour and overhead
Quantity: per batch
Unit price: -
Total (baht): 600
Total cost per batch
Quantity: -
Unit price: -
Total (baht): 2,360
| items | Quantity | Unit price | Total (baht) |
|---|---|---|---|
| Dried chillies | 2 kg | 320 | 640 |
| Shallots | 3 kg | 120 | 360 |
| Garlic | 2 kg | 160 | 320 |
| Coconut sugar | 2 kg | 60 | 120 |
| 200 g glass jars | 40 jars | 8 | 320 |
| Labour and overhead | per batch | - | 600 |
| Total cost per batch | - | - | 2,360 |
What does each jar cost?
A total of 2,360 baht divided by 40 jars gives a cost of 59 baht a jar. If you sell at 99 baht, you know right away the gross profit is 40 baht a jar, before delivery and marketing costs.
If dried chillies go up to 400 baht a kilogram, materials cost 160 baht more per batch and the cost per jar moves to 63 baht. A BOM shows you this before you set the wrong price.
How do BOM, MRP and ERP differ?
A BOM is the recipe for one product. MRP is planning how much material to buy from the BOM and the quantity you need to make. ERP is the system that brings production, stock, purchasing, sales and accounting together. So the BOM is the starting data that both MRP and ERP use.
What can a BOM do in an ERP system?
- Produce by recipe, and the system takes materials out of stock by the amount actually used
- Receive finished goods into stock with a cost per unit
- Check before producing whether there are enough materials; if not, the system will not let you start
- Record a lot number and expiry date for each batch produced
- Change a recipe and keep the old one as history, so you can compare past costs
BOMs in GORINY
GORINY has production recipes and production orders in the Business plan. You set the materials per recipe, the yield per batch, labour and overhead. When you produce, the system takes materials out and receives finished goods into stock with their cost. What you make can then be sold at the counter and given a tax invoice in the same program.
Frequently asked questions
- What is a BOM, in simple terms?
- A BOM is a production recipe. It says what materials one batch uses, how much of each, and how many units it makes, like a cooking recipe with exact quantities.
- What does BOM stand for?
- Bill of Materials, meaning the list of materials. In Thai it is often called the production recipe.
- Does a shop that does not make its own products need a BOM?
- No. A BOM is for businesses that make or process their own products, such as small factories, bakeries or shops that assemble gift sets. A shop that buys and resells only needs a stock system.
- What should cost from a BOM include?
- Every material including packaging, labour, and overhead such as gas and electricity, divided by the number of units each batch makes.
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