'Valuation Based On' Field in BOM

Question: What do the various options in Valuation Based On Field in Bill Of Materials (BOM) Form mean?

Answer: There are 3 available options in the Valuation Based On field;

Valuation Rate:

Item valuation rate is defined based on it's purchase/manufacture value + other charges.
For Purchase Item, it is defined based on charges entered in the Purchase Receipt. If you don't have any Purchase Receipt made for an item or a Stock Reconciliation, then you won't have Valuation Rate for that item.

Price List Rate:

Just like you pull item prices in sales and purchase transaction, it can be pulled in BOM via Price List Rate.

Last Purchase Rate:

It will be the last Purchase Rate value of an item. This value is updated in the item master as well, based on rate in the Purchase Order for this item.