Microsoft Office Tutorials and References
In Depth Information
You’ll have two main pictures of the budget in your project: one at the
moment you freeze your original plan (a baseline plan ) and the ongoing
picture of actual costs that comes from the activity and material usage you
record as your project moves along. You record a certain amount of work
effort on tasks, and tasks with resources assigned to them then run up costs
based on the effort expended or units of materials used.
It all adds up
The best way to understand how costs add up in your project is to look at an
example. John Smith (that’s not his real name) is managing a project
involving the building of a new gourmet ice-cream packaging plant. John has
created a task called Install Ice-Cream Mixers. Here are the costs John anticipates
for that task:
About ten person-hours of effort to do the installation
A fixed cost of $500 paid to the mixer manufacturer to oversee the
installation and train workers on the machine
Twenty pounds of ice-cream ingredients to test the mixers
The ten hours of effort will be expended by work resources. The total cost for
the ten hours is a calculation: 10
the resource rate. If the resource rate is
$20, this cost totals $200. If two resources work on the task, one at a rate of
$20 and one at a rate of $30, then (by default) Project splits the ten hours of
effort between them, and the resulting cost is $250.
The fixed cost of $500 for a fee to the manufacturer is created as a cost
resource. When you assign this resource to a task, you enter a cost for that
resource on that task. This cost won’t change based on the number of
resources or the time involved.
Finally, the cost for 20 pounds of ice cream (any flavor you like) is calculated
as 20
the unit cost of the ice-cream ingredients. If the unit cost is $2, this
cost would be $40.
And that’s how costs are assigned and how they add up on your projects.
You can create and assign resources that have no associated costs. For
example, if you want your boss to be available to review status reports but your
company doesn’t require that your boss be charged to your project, you can
simply use those resource assignments to remind you about the need for
your boss’s availability on that day or at that time.
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