diff --git a/erpnext/stock/doctype/stock_entry/stock_entry.py b/erpnext/stock/doctype/stock_entry/stock_entry.py
index b63df53bd32..e9a15a7e40d 100644
--- a/erpnext/stock/doctype/stock_entry/stock_entry.py
+++ b/erpnext/stock/doctype/stock_entry/stock_entry.py
@@ -70,6 +70,15 @@ from erpnext.controllers.subcontracting_inward_controller import SubcontractingI
 form_grid_templates = {"items": "templates/form_grid/stock_entry_grid.html"}
 
 
+def is_costed_out_of_finished_item(row) -> bool:
+	"""Whether the row takes its value out of the finished good instead of adding to it.
+
+	A secondary item that is not linked to a BOM has no cost allocation of its own, so it is
+	valued the way the legacy scrap item was: its cost is deducted from the finished good.
+	"""
+	return bool(row.is_legacy_scrap_item or (row.secondary_item_type and not row.bom_secondary_item))
+
+
 class StockEntry(StockController, SubcontractingInwardController):
 	# begin: auto-generated types
 	# This code is auto-generated. Do not modify anything in this block.
@@ -564,7 +573,8 @@ class StockEntry(StockController, SubcontractingInwardController):
 		)
 
 		zero_valuation_items = []
-		for d in self.get("items"):
+		finished_items_last = sorted(self.get("items"), key=lambda row: cint(row.is_finished_item))
+		for d in finished_items_last:
 			if d.s_warehouse or d.set_basic_rate_manually:
 				continue
 
@@ -736,7 +746,9 @@ class StockEntry(StockController, SubcontractingInwardController):
 		self, finished_item_qty, outgoing_items_cost=0, has_consumption_basis=False
 	) -> float:
 		settings = frappe.get_single("Manufacturing Settings")
-		scrap_items_cost = sum([flt(d.basic_amount) for d in self.get("items") if d.is_legacy_scrap_item])
+		scrap_items_cost = sum(
+			[flt(d.basic_amount) for d in self.get("items") if is_costed_out_of_finished_item(d)]
+		)
 
 		if settings.material_consumption:
 			outgoing_items_cost = self._get_rm_cost_for_manufacture(