Qty per Assembly Product Structure setup

Hi all, 

I am hoping to clarify an item regarding component qty per assembly in IFS Product Structures. In our environment, we laser cut sheet metal. When setting up the Product Structure, I was hoping to confirm that I am configuring them properly. 

Below is the current setup I am hoping to validate:

Component part: 

Qty per Assembly - 3(lb)

This is essentially the part weight (3lb). Reading the help, that is my assumption as to how it should be setup. I need 3lb of material to produce my part. 1lb of it is the scrap skeleton that is left over after laser cutting the part out.

By-Product:

steel scrap - 1(lb)

This is the skeleton of the part that is left over. 

In total 4lb of material is used: 3lb is the part and 1lb is the scrap as a result of the laser process, which is then sold. 

Any guidance eon the setup would be greatly appreciated!