Multi level Bill of material

To do subcomponents, let’s say you need Steel and Paint for the Steel portion of the Steel for the hammer.
First, determine that Steel is a sub component
Second, use SUMIF to add subcomponents
Then calculate like above (cost * rate / scrap)

See attached worksheet. Not sure if it'll help. But it's one way it's done. And this can be used for hundreds of products and thousands of components.