The BOM is usually created on a template or if its a once-off order, directly on the production order. Before a production order is activated, it is important that the production manager review the BOM. It may be that the specific order have variances that need to be changed before activating the production order.
Important to understand it that the BOM has several quantities per item. Firstly the BOM quantity is the number of raw material items required. Once in progress a production order keeps track of how many of the BOM items have been committed to the Work in Progress process using production input documents.
The result is that there may be unused BOM quantities. The production manager has to monitor and review these quantities before completing a production order.
When a production order is activated, the cost and list price of the items are saved in the production order (using the inventory prices at that time). When the order is completed, this can be reviewed and compared to prices in the inventory at that time.