diff --git a/erpnext/manufacturing/doctype/bom/bom.js b/erpnext/manufacturing/doctype/bom/bom.js
index 4dd8205a70c..5ee98de3767 100644
--- a/erpnext/manufacturing/doctype/bom/bom.js
+++ b/erpnext/manufacturing/doctype/bom/bom.js
@@ -65,7 +65,13 @@ frappe.ui.form.on("BOM", {
 		});
 	},
 
-	onload_post_render(frm) {
+	validate: function(frm) {
+		if (frm.doc.fg_based_operating_cost && frm.doc.with_operations) {
+			frappe.throw({message: __("Please check either with operations or FG Based Operating Cost."), title: __("Mandatory")});
+		}
+	},
+
+	onload_post_render: function(frm) {
 		frm.get_field("items").grid.set_multiple_add("item_code", "qty");
 	},
 
@@ -536,14 +542,20 @@ erpnext.bom.calculate_op_cost = function(doc) {
 	doc.operating_cost = 0.0;
 	doc.base_operating_cost = 0.0;
 
-	for(var i=0;i<op.length;i++) {
-		var operating_cost = flt(flt(op[i].hour_rate) * flt(op[i].time_in_mins) / 60, 2);
-		var base_operating_cost = flt(operating_cost * doc.conversion_rate, 2);
-		frappe.model.set_value('BOM Operation',op[i].name, "operating_cost", operating_cost);
-		frappe.model.set_value('BOM Operation',op[i].name, "base_operating_cost", base_operating_cost);
+	if(doc.with_operations) {
+		for(var i=0;i<op.length;i++) {
+			var operating_cost = flt(flt(op[i].hour_rate) * flt(op[i].time_in_mins) / 60, 2);
+			var base_operating_cost = flt(operating_cost * doc.conversion_rate, 2);
+			frappe.model.set_value('BOM Operation',op[i].name, "operating_cost", operating_cost);
+			frappe.model.set_value('BOM Operation',op[i].name, "base_operating_cost", base_operating_cost);
 
-		doc.operating_cost += operating_cost;
-		doc.base_operating_cost += base_operating_cost;
+			doc.operating_cost += operating_cost;
+			doc.base_operating_cost += base_operating_cost;
+		}
+	} else if(doc.fg_based_operating_cost) {
+		let total_operating_cost = doc.quantity * flt(doc.operating_cost_per_bom_quantity);
+		doc.operating_cost = total_operating_cost;
+		doc.base_operating_cost = flt(total_operating_cost * doc.conversion_rate, 2);
 	}
 	refresh_field(['operating_cost', 'base_operating_cost']);
 };
diff --git a/erpnext/manufacturing/doctype/bom/bom.json b/erpnext/manufacturing/doctype/bom/bom.json
index c31b69f3dc5..2d936ea92e4 100644
--- a/erpnext/manufacturing/doctype/bom/bom.json
+++ b/erpnext/manufacturing/doctype/bom/bom.json
@@ -33,6 +33,9 @@
   "column_break_23",
   "transfer_material_against",
   "routing",
+  "fg_based_operating_cost",
+  "fg_based_section_section",
+  "operating_cost_per_bom_quantity",
   "operations_section",
   "operations",
   "materials_section",
@@ -575,7 +578,26 @@
   {
    "fieldname": "scrap_items_section",
    "fieldtype": "Section Break",
-   "label": "Scrap Items"
+   "label": "Scrap Items",
+   "hide_border": 1
+  },
+  {
+   "default": "0",
+   "fieldname": "fg_based_operating_cost",
+   "fieldtype": "Check",
+   "label": "FG based Operating Cost"
+  },
+  {
+   "depends_on": "fg_based_operating_cost",
+   "fieldname": "fg_based_section_section",
+   "fieldtype": "Section Break",
+   "label": "FG Based Operating Cost Section"
+  },
+  {
+   "depends_on": "fg_based_operating_cost",
+   "fieldname": "operating_cost_per_bom_quantity",
+   "fieldtype": "Currency",
+   "label": "Operating Cost Per BOM Quantity"
   }
  ],
  "icon": "fa fa-sitemap",
diff --git a/erpnext/manufacturing/doctype/bom/bom.py b/erpnext/manufacturing/doctype/bom/bom.py
index 53af28df8a5..7048d131af0 100644
--- a/erpnext/manufacturing/doctype/bom/bom.py
+++ b/erpnext/manufacturing/doctype/bom/bom.py
@@ -614,18 +614,24 @@ class BOM(WebsiteGenerator):
 		"""Update workstation rate and calculates totals"""
 		self.operating_cost = 0
 		self.base_operating_cost = 0
-		for d in self.get("operations"):
-			if d.workstation:
-				self.update_rate_and_time(d, update_hour_rate)
+		if (self.get("with_operations")):
+			for d in self.get("operations"):
+				if d.workstation:
+					self.update_rate_and_time(d, update_hour_rate)
 
-			operating_cost = d.operating_cost
-			base_operating_cost = d.base_operating_cost
-			if d.set_cost_based_on_bom_qty:
-				operating_cost = flt(d.cost_per_unit) * flt(self.quantity)
-				base_operating_cost = flt(d.base_cost_per_unit) * flt(self.quantity)
+				operating_cost = d.operating_cost
+				base_operating_cost = d.base_operating_cost
+				if d.set_cost_based_on_bom_qty:
+					operating_cost = flt(d.cost_per_unit) * flt(self.quantity)
+					base_operating_cost = flt(d.base_cost_per_unit) * flt(self.quantity)
 
-			self.operating_cost += flt(operating_cost)
-			self.base_operating_cost += flt(base_operating_cost)
+				self.operating_cost += flt(operating_cost)
+				self.base_operating_cost += flt(base_operating_cost)
+
+		elif(self.get("fg_based_operating_cost")):
+			total_operating_cost = flt(self.get("quantity")) * flt(self.get("operating_cost_per_bom_quantity"))
+			self.operating_cost = total_operating_cost
+			self.base_operating_cost = flt(total_operating_cost * self.conversion_rate, 2)
 
 	def update_rate_and_time(self, row, update_hour_rate=False):
 		if not row.hour_rate or update_hour_rate: