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So how does odoo establish priority over different BOMs for the same product?

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By sequence. Which bom is up, this will have upper sequence, this will be valid.

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So it will never check what is in the second BOM then? Lets say, if I can make the same product with different materials that have fluctuating value I have to manually move the lowest price to the top of the BOMs list?

yes, by default, second bom will just be thats all :)

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Suppose I have a product with 2 BOM's: 

  • BOM set as manufacture
  • BOM set as subcontracted

Is there any way I can choose which one I want to use from the MO? Some times it may be one and some times the other, so it is a bit of a pint to have to resequence my BOM's every time I want a change...

Is there a way to achieve something like that?

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Yes, on the MO a BOM can be chosen while on Draft stage. Once MO is confirmed this option isn't available.

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