Microsoft Project 2010 : Fine-Tuning Task Details (part 7) - Entering Fixed Costs

For projects in which you must track budget or financial costs, you may need to work with several different sources of costs. These include costs associated with resources, as well as costs associated directly with a specific task.

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.

However, you may 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:

If you assign resources with cost 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 project 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:

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-flow needs. By default, Project assigns the prorated accrual method for fixed costs, but you can change that to match your organization’s cost accounting practices.

For the new book project, you’ve learned that the generating of page proofs by the color setting services firm will cost $500. Lucerne Publishing has a credit account with this firm, but to keep the book’s P&L statement accurate, you’d like to accrue this expense when the color setting services firm completes the task.

In this exercise, you assign a fixed cost to a task and specify its accrual method.

Project will now schedule a $500 cost against the task Generate proofs at the task’s end date, and the project will incur this cost when the task ends. This cost is independent of the task’s duration and of any costs of resources that could be assigned to it.