Conversion of Estimates to Bill of Material

We’re working with a client that produces highly customized items — their process starts with creating an estimate that includes all material and labor costs, and once approved, they convert it into a production order. However, we’ve noticed that the planned costs on the production order don’t match what was originally estimated; instead, the system seems to pull material costs from the stock item’s last cost This causes confusion when comparing actual vs. planned cost since the production order doesn’t reflect what was quoted to the customer. Has anyone else experienced this issue or found a configuration or workaround to ensure estimated costs carry over accurately into production orders?

The costs in the Bills of Material are informational only.  The BOM costs are determined when you do a cost roll and then it gets the costs from the Item Warehouse records depending on the valuation method; specific/FIFO = Last Cost, Average if not zero average else last cost, std = std.  Similarly, when you create a production order and/or release it, it does the cost roll.

I would agree with you that the Estimate costs would be better but they would need to changes made to the cost roll process used by both bills and production orders to preserve the costs when the source of the production order is Estimate. It gets more complicated if the Estimate includes stock items that are subassemblies because the production order cost roll does all levels.

Thank you for your reply — that helps a lot. So just to confirm, out of the box there’s no functionality to retain the material cost when creating a production order from an estimate? Sounds like a customization would be needed to preserve those estimated costs through to production, right?

Correct, it always is going to get the unit cost from the Item Warehouse, However, if the estimate includes a new stock item you could update the last cost with an import scenario and the cost roll would pick it up.  That what we do during conversion so we can validate the BOM costs.