Items are a combination of material and/or labour to form a unit that can be invoiced or used in other operations. They are used to calculate the production/supply cost of the item and to track material usage.
For an example say you are performing car maintenance for your customers. You can setup “Oil Change” as an item in your system with a price attached to it. Inside that you can attach the labour needed, oil, filters, paper towels, etc. Once you generate an invoice to your customer they will only see “Oil Change” but it allows you to track all other material that was used for that invoice.