I'm not sure if this gives the correct results. I can't compare it to anything but it should give you something to start with.

;WITH Sample AS(

SELECTI.StockCode,

B.ParentPart,

B.Component,

B.QtyPer,

B.Route,

0 AS [level]

from #BomSteve B

JOIN #InvSteve I ON I.StockCode = B.ParentPart

UNION ALL

SELECTs.StockCode,

B.ParentPart,

B.Component,

B.QtyPer,

B.Route,

s.[level] + 1 AS [level]

from Sample s

JOIN #BomSteve B ON s.Component = B.ParentPart

)

SELECT *

FROM Sample

ORDER BY StockCode, [level], ParentPart, Component