diff --git a/erpnext/manufacturing/doctype/bom/test_bom.py b/erpnext/manufacturing/doctype/bom/test_bom.py
index 62fc072..bc1bea7 100644
--- a/erpnext/manufacturing/doctype/bom/test_bom.py
+++ b/erpnext/manufacturing/doctype/bom/test_bom.py
@@ -11,7 +11,9 @@
 
 from erpnext.buying.doctype.purchase_order.test_purchase_order import create_purchase_order
 from erpnext.manufacturing.doctype.bom.bom import item_query, make_variant_bom
-from erpnext.manufacturing.doctype.bom_update_tool.bom_update_tool import update_cost
+from erpnext.manufacturing.doctype.bom_update_log.test_bom_update_log import (
+	update_cost_in_all_boms_in_test,
+)
 from erpnext.stock.doctype.item.test_item import make_item
 from erpnext.stock.doctype.stock_reconciliation.test_stock_reconciliation import (
 	create_stock_reconciliation,
@@ -80,7 +82,7 @@
 		reset_item_valuation_rate(item_code="_Test Item 2", qty=200, rate=rm_rate + 10)
 
 		# update cost of all BOMs based on latest valuation rate
-		update_cost()
+		update_cost_in_all_boms_in_test()
 
 		# check if new valuation rate updated in all BOMs
 		for d in frappe.db.sql(
diff --git a/erpnext/manufacturing/doctype/bom/test_records.json b/erpnext/manufacturing/doctype/bom/test_records.json
index 25730f9..507d319 100644
--- a/erpnext/manufacturing/doctype/bom/test_records.json
+++ b/erpnext/manufacturing/doctype/bom/test_records.json
@@ -32,6 +32,7 @@
   "is_active": 1,
   "is_default": 1,
   "item": "_Test Item Home Desktop Manufactured",
+  "company": "_Test Company",
   "quantity": 1.0
  },
  {
diff --git a/erpnext/manufacturing/doctype/bom_update_log/bom_update_log.py b/erpnext/manufacturing/doctype/bom_update_log/bom_update_log.py
index d714b9d..71430bd 100644
--- a/erpnext/manufacturing/doctype/bom_update_log/bom_update_log.py
+++ b/erpnext/manufacturing/doctype/bom_update_log/bom_update_log.py
@@ -1,7 +1,7 @@
 # Copyright (c) 2022, Frappe Technologies Pvt. Ltd. and contributors
 # For license information, please see license.txt
 import json
-from typing import Any, Dict, List, Optional, Tuple
+from typing import Any, Dict, List, Optional, Tuple, Union
 
 import frappe
 from frappe import _
@@ -101,12 +101,14 @@
 		handle_exception(doc)
 	finally:
 		frappe.db.auto_commit_on_many_writes = 0
-		frappe.db.commit()  # nosemgrep
+
+		if not frappe.flags.in_test:
+			frappe.db.commit()  # nosemgrep
 
 
 def process_boms_cost_level_wise(
 	update_doc: "BOMUpdateLog", parent_boms: List[str] = None
-) -> None:
+) -> Union[None, Tuple]:
 	"Queue jobs at the start of new BOM Level in 'Update Cost' Jobs."
 
 	current_boms = {}
@@ -133,6 +135,10 @@
 		values = {"current_level": current_level}
 
 	set_values_in_log(update_doc.name, values, commit=True)
+
+	if frappe.flags.in_test:
+		return current_boms, current_level
+
 	queue_bom_cost_jobs(current_boms, update_doc, current_level)
 
 
@@ -155,6 +161,10 @@
 		)
 		batch_row.db_insert()
 
+		if frappe.flags.in_test:
+			# skip background jobs in test
+			return boms_to_process, batch_row.name
+
 		frappe.enqueue(
 			method="erpnext.manufacturing.doctype.bom_update_log.bom_updation_utils.update_cost_in_level",
 			doc=update_doc,
@@ -216,7 +226,10 @@
 def get_processed_current_boms(
 	log: Dict[str, Any], bom_batches: Dict[str, Any]
 ) -> Tuple[List[str], Dict[str, Any]]:
-	"Aggregate all BOMs from BOM Update Batch rows into 'processed_boms' field and into current boms list."
+	"""
+	Aggregate all BOMs from BOM Update Batch rows into 'processed_boms' field
+	and into current boms list.
+	"""
 	processed_boms = json.loads(log.processed_boms) if log.processed_boms else {}
 	current_boms = []
 
diff --git a/erpnext/manufacturing/doctype/bom_update_log/bom_updation_utils.py b/erpnext/manufacturing/doctype/bom_update_log/bom_updation_utils.py
index 49e747c..dde1e4e 100644
--- a/erpnext/manufacturing/doctype/bom_update_log/bom_updation_utils.py
+++ b/erpnext/manufacturing/doctype/bom_update_log/bom_updation_utils.py
@@ -63,7 +63,9 @@
 		handle_exception(doc)
 	finally:
 		frappe.db.auto_commit_on_many_writes = 0
-		frappe.db.commit()  # nosemgrep
+
+		if not frappe.flags.in_test:
+			frappe.db.commit()  # nosemgrep
 
 
 def get_ancestor_boms(new_bom: str, bom_list: Optional[List] = None) -> List:
@@ -119,8 +121,8 @@
 		bom_doc.calculate_cost(save_updates=True, update_hour_rate=True)
 		bom_doc.db_update()
 
-		if index % 100 == 0:
-			frappe.db.commit()
+		if (index % 100 == 0) and not frappe.flags.in_test:
+			frappe.db.commit()  # nosemgrep
 
 
 def get_next_higher_level_boms(
@@ -210,7 +212,7 @@
 		query = query.set(key, value)
 	query.run()
 
-	if commit:
+	if commit and not frappe.flags.in_test:
 		frappe.db.commit()  # nosemgrep
 
 
diff --git a/erpnext/manufacturing/doctype/bom_update_log/test_bom_update_log.py b/erpnext/manufacturing/doctype/bom_update_log/test_bom_update_log.py
index 4f15133..d770f6c 100644
--- a/erpnext/manufacturing/doctype/bom_update_log/test_bom_update_log.py
+++ b/erpnext/manufacturing/doctype/bom_update_log/test_bom_update_log.py
@@ -1,14 +1,27 @@
 # Copyright (c) 2022, Frappe Technologies Pvt. Ltd. and Contributors
 # See license.txt
 
+import json
+
 import frappe
 from frappe.tests.utils import FrappeTestCase
 
 from erpnext.manufacturing.doctype.bom_update_log.bom_update_log import (
 	BOMMissingError,
+	get_processed_current_boms,
+	process_boms_cost_level_wise,
+	queue_bom_cost_jobs,
 	run_replace_bom_job,
 )
-from erpnext.manufacturing.doctype.bom_update_tool.bom_update_tool import enqueue_replace_bom
+from erpnext.manufacturing.doctype.bom_update_log.bom_updation_utils import (
+	get_next_higher_level_boms,
+	set_values_in_log,
+	update_cost_in_level,
+)
+from erpnext.manufacturing.doctype.bom_update_tool.bom_update_tool import (
+	enqueue_replace_bom,
+	enqueue_update_cost,
+)
 
 test_records = frappe.get_test_records("BOM")
 
@@ -31,17 +44,12 @@
 	def tearDown(self):
 		frappe.db.rollback()
 
-		if self._testMethodName == "test_bom_update_log_completion":
-			# clear logs and delete BOM created via setUp
-			frappe.db.delete("BOM Update Log")
-			self.new_bom_doc.cancel()
-			self.new_bom_doc.delete()
-
-			# explicitly commit and restore to original state
-			frappe.db.commit()  # nosemgrep
-
 	def test_bom_update_log_validate(self):
-		"Test if BOM presence is validated."
+		"""
+		1) Test if BOM presence is validated.
+		2) Test if same BOMs are validated.
+		3) Test of non-existent BOM is validated.
+		"""
 
 		with self.assertRaises(BOMMissingError):
 			enqueue_replace_bom(boms={})
@@ -55,9 +63,7 @@
 	def test_bom_update_log_queueing(self):
 		"Test if BOM Update Log is created and queued."
 
-		log = enqueue_replace_bom(
-			boms=self.boms,
-		)
+		log = enqueue_replace_bom(boms=self.boms)
 
 		self.assertEqual(log.docstatus, 1)
 		self.assertEqual(log.status, "Queued")
@@ -65,32 +71,51 @@
 	def test_bom_update_log_completion(self):
 		"Test if BOM Update Log handles job completion correctly."
 
-		log = enqueue_replace_bom(
-			boms=self.boms,
-		)
+		log = enqueue_replace_bom(boms=self.boms)
 
-		# Explicitly commits log, new bom (setUp) and replacement impact.
-		# Is run via background jobs IRL
-		run_replace_bom_job(
-			doc=log,
-			boms=self.boms,
-			update_type="Replace BOM",
-		)
+		# Is run via background job IRL
+		run_replace_bom_job(doc=log, boms=self.boms)
 		log.reload()
 
 		self.assertEqual(log.status, "Completed")
 
-		# teardown (undo replace impact) due to commit
-		boms = frappe._dict(
-			current_bom=self.boms.new_bom,
-			new_bom=self.boms.current_bom,
+
+def update_cost_in_all_boms_in_test():
+	"""
+	Utility to run 'Update Cost' job in tests immediately without Cron job.
+	Run job for all levels (manually) until fully complete.
+	"""
+	parent_boms = []
+	log = enqueue_update_cost()  # create BOM Update Log
+
+	while log.status != "Completed":
+		level_boms, current_level = process_boms_cost_level_wise(log, parent_boms)
+		log.reload()
+
+		boms, batch = queue_bom_cost_jobs(
+			level_boms, log, current_level
+		)  # adds rows in log for tracking
+		log.reload()
+
+		update_cost_in_level(log, boms, batch)  # business logic
+		log.reload()
+
+		# current level done, get next level boms
+		bom_batches = frappe.db.get_all(
+			"BOM Update Batch",
+			{"parent": log.name, "level": log.current_level},
+			["name", "boms_updated", "status"],
 		)
-		log2 = enqueue_replace_bom(
-			boms=self.boms,
+		current_boms, processed_boms = get_processed_current_boms(log, bom_batches)
+		parent_boms = get_next_higher_level_boms(child_boms=current_boms, processed_boms=processed_boms)
+
+		set_values_in_log(
+			log.name,
+			values={
+				"processed_boms": json.dumps(processed_boms),
+				"status": "Completed" if not parent_boms else "In Progress",
+			},
 		)
-		run_replace_bom_job(  # Explicitly commits
-			doc=log2,
-			boms=boms,
-			update_type="Replace BOM",
-		)
-		self.assertEqual(log2.status, "Completed")
+		log.reload()
+
+	return log
diff --git a/erpnext/manufacturing/doctype/bom_update_tool/test_bom_update_tool.py b/erpnext/manufacturing/doctype/bom_update_tool/test_bom_update_tool.py
index fae72a0..d1882e5 100644
--- a/erpnext/manufacturing/doctype/bom_update_tool/test_bom_update_tool.py
+++ b/erpnext/manufacturing/doctype/bom_update_tool/test_bom_update_tool.py
@@ -1,11 +1,13 @@
-# Copyright (c) 2015, Frappe Technologies Pvt. Ltd. and Contributors
+# Copyright (c) 2022, Frappe Technologies Pvt. Ltd. and Contributors
 # License: GNU General Public License v3. See license.txt
 
 import frappe
 from frappe.tests.utils import FrappeTestCase
 
 from erpnext.manufacturing.doctype.bom_update_log.bom_update_log import replace_bom
-from erpnext.manufacturing.doctype.bom_update_tool.bom_update_tool import update_cost
+from erpnext.manufacturing.doctype.bom_update_log.test_bom_update_log import (
+	update_cost_in_all_boms_in_test,
+)
 from erpnext.manufacturing.doctype.production_plan.test_production_plan import make_bom
 from erpnext.stock.doctype.item.test_item import create_item
 
@@ -25,8 +27,8 @@
 		boms = frappe._dict(current_bom=current_bom, new_bom=bom_doc.name)
 		replace_bom(boms)
 
-		self.assertFalse(frappe.db.sql("select name from `tabBOM Item` where bom_no=%s", current_bom))
-		self.assertTrue(frappe.db.sql("select name from `tabBOM Item` where bom_no=%s", bom_doc.name))
+		self.assertFalse(frappe.db.exists("BOM Item", {"bom_no": current_bom, "docstatus": 1}))
+		self.assertTrue(frappe.db.exists("BOM Item", {"bom_no": bom_doc.name, "docstatus": 1}))
 
 		# reverse, as it affects other testcases
 		boms.current_bom = bom_doc.name
@@ -52,13 +54,13 @@
 		self.assertEqual(doc.total_cost, 200)
 
 		frappe.db.set_value("Item", "BOM Cost Test Item 2", "valuation_rate", 200)
-		update_cost()
+		update_cost_in_all_boms_in_test()
 
 		doc.load_from_db()
 		self.assertEqual(doc.total_cost, 300)
 
 		frappe.db.set_value("Item", "BOM Cost Test Item 2", "valuation_rate", 100)
-		update_cost()
+		update_cost_in_all_boms_in_test()
 
 		doc.load_from_db()
 		self.assertEqual(doc.total_cost, 200)