Bill of Materials for Work In Progress Items

I have an issue with BOM and I am not sure if I am getting this correct.
I have an Item A which is Raw Material
With Item A I can process it to develop Item B which is Work In Progress and I have defined a specific BOM for Item B. Item B is stocked as is.
Then Item B can be made into Item C or Item D which are both Finished Goods.
When I create a BOM for Item C and/or D I configure each their BOMs to be made of Item B but:

  1. I notice that in the BOM towards the bottom it mentions “Materials Required (Exploded)” where it shows Item A instead of Item B
  2. When I raise a Purchase Order it requires to use Item A even though I have a Warehouse full of Item B.

Can anyone help me make sense of this?