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Explain: Bills of materials and its functions.
A Bill of Materials (BOM) is a detailed list of all the items required for a job, process or production. It simply gives a detail of all the materials as well as quantities of each item which are being in used in the manufacture process. It is prepared by the production department.
The functions of bill of materials are as follows:
1. It gives an indication to all the persons about the orders to be executed.
2. It gives an indication to the purchase department to purchase the required material if the same is not available with the stores.
3. On the basis of bills of materials the production department places the material requisition slips.
4. Preparation of Bill of Materials in advance serves as a base for the computation of the material cost in respect of a job or production order and for quoting the price for the production order.
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