Microsoft Office Tutorials and References
In Depth Information
Entering fixed costs
For many projects, financial costs are derived mainly from costs associated with work
resources, such as people and equipment, or with material resources. To handle costs of
similar types for which you want to track aggregate sums (travel is one example in many
projects), Project supports cost resources . If you need a refresher on cost resources, see
Chapter 5, “Setting up resources.”
However, you might occasionally want to associate a cost with a task that is not tied to
resources or work and is not something you want to aggregate across the project. Project
calls this a fixed cost , and it is applied per task. A fixed cost is a specific monetary amount
budgeted for a task. It remains the same regardless of any resources assigned to the task.
The following are common examples of fixed costs in projects:
▪ A setup fee, charged in addition to a per-day rental fee, for a piece of equipment
▪ A building permit
If you assign resources with pay rates, assign cost resources, or add fixed costs to a task,
Project adds it all together to determine the task’s total cost. If you do not enter resource
cost information into a plan (perhaps because you do not know how much your work
resources will be paid), you can still gain some control over the project’s total cost by entering
fixed costs per task.
You can specify when fixed costs should accrue as follows:
▪ Start The entire fixed cost is scheduled for the start of the task. When you track
progress, the entire fixed cost of the task is incurred as soon as the task starts.
▪ End The entire fixed cost is scheduled for the end of the task. When you track
progress, the entire fixed cost of the task is incurred only after the task is completed.
▪ Prorated (Default accrual method) The fixed cost is distributed evenly over the
duration of the task. When you track progress, the project incurs the cost of the task
at the rate at which the task is completed. For example, if a task has a $100 fixed cost
and is 75 percent complete, the project has incurred $75 against that task.
When you plan a project, the accrual method you choose for fixed costs determines how
these costs are scheduled over time. This can be important in anticipating budget and
cash-low needs. By default, Project uses the prorated accrual method for fixed costs, but
you can change that to match your organization’s cost accounting practices.
The scenario: At Lucerne Publishing, you’ve learned that the generating of page proofs
by the color-setting services firm will cost $500. Lucerne Publishing has a credit account