For example, if you purchase 40 ft steel beams and then break them down into various sizes for sale (3ft, 2ft, 6ft sections, etc.) you can use the Item Breakdown screen to define the number of each sub-piece you will be making from your original pieces.
The cost of the main item is then transferred to the sub items based on weight (ex. for a 40 ft beam a 10 ft cut section would get 25% of the 40 ft beam's cost).
You can define the sub-item relationships in the item add/edit screen by selecting the main item for the field Item Family for each of the smaller sub-pieces.