RWDAdmin said:

id the best way to set up the inventory item for these products as you do not always know from what size material the goods are being produced from

You have to decide whether your inventory is going to be:

 - a 'periodic' system where you periodically (Annually, at least) tally up all the material that you have, and record opening and ending value as part of Cost of Goods Sold, or

 - a 'Perpetual' system where you record everything going in, and going out, and all 'conversions' from one type of inventory to another.

If you can't know what material will be used ahead of time, then a computerized 'perpetual' system can't use a 'bill of materials', but you can use the 'Build from Item Assembly' to record a 'conversion' from, for instance 200' of used drill stem, some flat bar, some channel, welding supplies, and labour, into a Texas Gate.  

If the item is standardized, use the Bill of Materials in the Finished Goods to set up the input items and assembly cost.  If every job is custom, use 'Build from Item Assembly', or use a 'purchase Invoice' to get more flexibility in recording all the materials in and out.

RWDAdmin said:

How do you transfer inventory items to a project for costing?

If you're using Inventory, the cost of Inventory purchased and sold is allocated as an Inventory Asset amount, but the Cost of Goods Sold is only recorded on Sales Invoices.

RWDAdmin said:

There is way too much to list all on invoices and they cannot be broken into a build because to many items between areas, not clearly specific to certain things you could use build for.  And some projects can take months to complete

After WWII's code-breaking and atomic bomb design, computers were designed and built for tracking inventory Bills of Materials, and Accounting for payroll.  If the product that you build can't be broken into sub-components and sub-sub-components in a hierarchy from the whole unit down to the fasteners and pipe fittings, then a more project-based approach, with periodic inventory, would be more practical.

Using Sage 50, you could record purchases of each component as inventory, then record a series of adjustments into work-in-progress, as components are pulled for use, against each project they are used for.   If you also use time sheets to track labour cost for each project into work-in-progress, and apply overhead to work-in-progress, you could then collect all the costs for each project into work-in-progress.  

When a Project is finished, you take all the costs out of work-in-progress and record them as Finished Goods inventory items.   When you sell that finished item, the cost is taken out and the revenue is recorded. 

Cost Accounting is a larger topic than a post in a forum.   Tracking a series of complex projects in Sage 50 will require a lot of reports and a fair bit of manual effort.