Before you start
Add the raw materials first, as inventory items with Raw material set to Yes. See Add inventory items.
Create a composite item
Go to Inventory → Items, open the Composite items tab, and click Create Composite Items → Create manually.
Under Item details, enter the Item name, SKU, Unit and Selling price.
Under Components, add each raw material and the quantity one unit needs.
Check the Accounts: Revenue account, Cost of goods sold account and Tax.
Optionally fill in Additional details: Reorder unit, Shelf life (days), Branch, Item categories and Tags.
Click Create.
See what's inside
Open the composite item and choose the Line items tab. It shows each component's Quantity, Unit cost and Line total, plus the Total material cost of one unit. In this example that's $5.03. The Overview tab shows Stock on hand, prices and accounts.
Make it
A composite item gets stock only when you produce it. Open it and click Actions → Create production order. See Production orders.
Tips
Use decimals for materials measured by weight or volume, e.g. 0.55 kg.
Duplicate a composite item (Actions → Duplicate) to set up a similar product quickly.