Outsourced Manufacturing - Item configuration question

We are evaluating the Outsourced Manufacturing feature for use case described below and have a fundamental question on how to setup and configure the items

Use Case: Raw Steel is purchased from Vendor 1 using standard PO; shipped to and received at Outsource Mfg Vendor A. Outsource Mfg Vendor A provides cut/stamp service and ships resulting product to Outsource Mfg Vendor B. Outsource Vendor B provides hardening service and ships resulting product to company manufacturing location to build out finished good product for sale

Question: Should items be setup as follows? Or is there a different configuration that facilitates roll up of the costs to final Finished Goods item?