Accounting Dictionary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Bill of Materials

Definition: A bill of materials is the record of the materials used to construct a product. It can include raw materials, sub-assemblies and supplies. A bill of materials may include not only the unit quantity required to construct the finished product, but also an estimate of scrap that will occur during the production process.

The bill of materials is used to calculate the cost of a product, as well as to order parts from suppliers.