There are really 3 options to do it:

Option 1. Not tracking inventory (by piece) and using manual journals.

1. Recording production:
   D Finished Goods
   C Raw materials
   
   Or, if you track WIP...
   D Work in progress (when materials are used)
   C Raw materials (when materials are used)
   D Finished goods (when production is finished) 
   C Work in progress (when production is finished) 
   
   
2. Once invoiced and shipped:
   D Cost of goods sold
   C Finished goods

Option 2. The workaround, what Rustler described.

The workaround actually performs the same transactions like the above, but without doing manual journals. 

Option 3. Choose an inventory or a manufacturing app, that can do it.

In the QuickBooks app store there are inventory apps that support light assembly (simply converting raw materials into finished goods), like SOS Inventory, and several apps for manufacturing (in addition, calendar and capacity scheduling, MRP, shop-floor control), like MRPeasy, depending on depth/complexity required. They sync automatically with QBO.