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Microsoft Project 2010 : Setting Up a Project Budget - Preparing for Cost Calculations

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Suppose you're responsible for planning your departmental retreat, appropriately scheduled to coincide with the circus that's coming to town. It's a great opportunity for team-building and entertainment. You've entered work resource rates and material resource costs. You've also diligently assigned resources to their tasks. Project multiplies task time by resource cost rates, and suddenly something magical happens—reliable cost information about your tasks and the project as a whole appears in your Project file.

Add any necessary cost resources or miscellaneous fixed costs to tasks that need them—and your cost forecasts are now looking pretty accurate.

In this section, you'll learn about the importance of entering accurate costs for labor and materials. You'll also learn how to assign cost resources to tasks and how to specify the costs for those assignments. Finally, you'll learn how to enter a miscellaneous cost for a task if needed.

1. Assigning Cost Resources to Tasks

Now you're ready to assign your cost resources. Remember those cost items that contribute to tasks but have no bearing on the schedule? Items like lodging, rentals, or printing can't make a task finish any faster, and yet they contribute to the project cost, so you must figure them in. The departmental retreat project is teeming with cost resources.

1.1. Assigning cost resources with the Assign Resources dialog box

After you create cost resources in the Resource Sheet, it's time to assign them to the appropriate tasks and enter their cost for that particular assignment. Here are the steps:

  1. Display any task-oriented view.

    You may gravitate to the all-purpose Gantt Chart view, but you can assign resources to tasks in the Network Diagram, Calendar view, Task Usage view, or any other task-oriented view.

  2. Choose Resource→Assignments→Assign Resources.

    The Assign Resources dialog box opens.

  3. In the task list, select the task to which you want to assign a cost resource.

    Project aficionados know that the Assign Resources dialog box is one of the few dialog boxes that can stay open while you do something in the active view.

  4. In the Assign Resources dialog box, select the name of the cost resource, and then click Assign.

    A checkmark appears next to the cost resource's name, which scoots up near the top of the list of resources with other resources already assigned to the selected task.

  5. In the Cost column for the assigned cost resource, type its cost for the task.

    What makes cost resources so useful is that they don't have a set cost value—you can enter a different cost for each task to which you assign a specific cost resource. But since it's a single cost resource, you can also see how much you're spending on that one cost resource across all the tasks to which it's assigned.

    For example, suppose you need to assign the "Conference Room Rental" cost resource to two different tasks: "Conduct day 1 of retreat" and "Conduct day 2 of retreat." Day 1 is a full 8-hour day, and the cost is $200. Day 2 is just a 5-hour day, so the conference room rental cost for that day is only $125.

    You select the "Conduct day 1 of retreat" task, assign the "Conference Room Rental" resource to it, and then, in the Cost column, enter $200. Then you select the "Conduct day 2 of retreat" task, assign the "Conference Room Rental" resource to it as well, and then, in the Cost column, enter $125.

  6. If the same task uses a second cost resource, select its name, as shown in Figure 1, and then click Assign.

    For example, you might have a cost resource called "Catering" that goes with the "Conduct Day 1 of Retreat" task in addition to the "Conference Room Rental" cost resource.

  7. To assign cost resources to another task, select the task, and then repeat steps 4–6.

    When you're finished assigning cost resources, click Close to close the Assign Resources dialog box.

You don't even have to know the cost for a cost resource when you're assigning it to a task. Go ahead and make the assignment, and then add the cost later. Even better, enter a ballpark figure in the Assign Resources dialog box's Cost field, so you have some kind of cost estimate for the task. Enter a task note indicating that you're waiting on cost information, as illustrated in Figure 2. That way, you won't lead yourself, or anyone else, astray. (The box on Entering a Task Note describes how to document items you're waiting for using task notes.)

Figure 1. Not only can you assign the same cost resource to different tasks with different cost amounts, you can also assign multiple cost resources to a single task. That trick differentiates cost resources from fixed costs. There's only one Fixed Cost field. If a task has more than one fixed cost, then you must enter the total in the field.

Figure 2. In the Task Information dialog box (double-click a task to open it), select the Notes tab, and then type a note for the current task. You can format your note in a few rudimentary ways, and even insert objects from other programs.


The Assign Resources dialog box isn't the only game in town for entering or changing cost resource costs. You can also use the Task Information dialog box. The Resources tab lists all resources assigned to the selected task. The Cost column is available for your editing pleasure.

Up To Speed: Entering a Task Note

Task notes are the electronic equivalent of a yellow sticky note for tasks. You may find such notes handy for a quick reminder to yourself that you're awaiting some cost information. The note can also be as elaborate as a copy of an email from a supplier providing a full breakdown of their cost estimate to you. Of course, the note can be about anything—not just costs.

Select the task for the note, and then choose Task→Properties→Task Notes, which incidentally looks like a yellow sticky note. Project opens the Task Information dialog box's Notes tab. Type or paste your note, and then click OK.

In some views, like the Gantt Chart view with the typical Entry table applied, a little note icon appears in the indicators column to the left of the Task Name column. You can just rest your mouse pointer over that icon to read the note in a pop-up. Otherwise, double-click the task to open the Task Information dialog box. Select the Notes tab, and then read or revise the note as you will.

1.2. Assigning cost resources in a table

You can also add cost resource values in a usage view's table area, because these views show assignments. To enter costs in the Task Usage view or Resource Usage view, do the following:

  1. Display the view you want.

    Choose Task Usage if you want to see the assigned resources under each task. Choose Resource Usage if you want to see the assigned tasks under each resource. With either usage view, you get to see assignments, that intersection of tasks with resources, and you can get additional assignment information you can't see anywhere else.

  2. In the table area on the left, right-click the column heading next to where you want to add the Cost column, and then choose Insert Column. In the "Field name" drop-down list, type cost to quickly scroll to and choose the Cost field.

    Project displays the Cost column in the sheet to the left of the selected column. In the Task Usage view, the Cost field for the task and resource assignment are both editable. However, in the Resource Usage view, the Cost field is editable only for the assignment (the task name under the resource name).

  3. Enter or change the cost information for assigned cost resources as necessary.

    When you change cost information for an assignment in a usage view, the cost at the rolled-up summary level (the task cost) changes to reflect the additional assignment cost. The box on Specifying When Costs Are Incurred explains how you can define exactly when costs are incurred.

Power Users' Clinic: Specifying When Costs Are Incurred

Ordinarily, when you enter costs for cost resources, they're prorated and distributed equally over the task duration. For example, suppose you assigned a cost resource of "Airfare" at $200 to a 5-day task. Project automatically distributes the $200 across the 5 days for $40 each day. In the Resource Sheet, you can change a resource's Accrue At field to Start or End if you want the cost to be incurred on the task's start date or finish date.

However, if you want to change when one instance of a cost resource is incurred, you can do that in the time-phased portion of the Task Usage or Resource Usage view. In this example, it makes sense for the full $200 to show up on the task's start date.

To do that, follow these steps:

  1. Choose View→Task Views→Task Usage or View→Resource Views→Resource Usage.

  2. Choose Format→Details and then turn on the Cost checkbox. This adds the Cost row to the time-phased portion of the usage view.

  3. Enter or change the time-phased cost information for the cost resource as you wish.

2. Entering an Oddball Cost for a Task

Every once in a while a miscellaneous cost crops up that may not warrant the creation of a cost resource. For example, the "Clown workshop team-building activity" task requires rubber noses and a couple of pairs of oversized shoes. One option is to set up one catch-all cost resource, for example called Miscellaneous Costs. However, if you know this task is the only one that needs this kind of cost, a fixed cost tied to the task is quicker. Here's how you enter a fixed cost:

  1. Display any task sheet view.

    Examples of task sheet views include the good old Gantt Chart view, the Tracking Gantt, and the Task Entry view. All you need is a table area for task information

  2. Display the Cost table by choosing View→Data. Click the down arrow next to Tables and then, on the drop-down list, choose Cost.

    In the upper-left corner of the table, you can also right-click the Select All cell, at the intersection between the first row and the first column. In the menu that appears, choose Cost. The Cost table appears, as shown in Figure 3.

    Figure 3. In addition to entering fixed costs, you can use the Cost table to see total scheduled cost for each task. Later on, after you've set a baseline and are tracking progress, you can use this table to see whether you're blasting past your planned cost for the task.

  3. Select the Fixed Cost cell for the task, and then type the cost.

    If necessary, select the Fixed Cost Accrual field for the task, and then select Prorated, Start, or End to indicate when the cost should be incurred during the task duration.

    The typical accrual for fixed costs is Prorated, which means the fixed cost is divided into equal portions across the task's duration. For example, if you have a fixed cost of $100 on a 5-day task, the prorated setting incurs $20 each day, which you can see if you add the Cost field to the time-phased portion of the Task Usage or Resource Usage view.

    Change the fixed cost accrual to Start if you want the full cost to be incurred on the day the task begins. Change the accrual to End if you want the full cost to be incurred on the day the task ends. Which one you choose can depend on the nature of the cost or your accounting guidelines.

    You can change the typical method for fixed-cost accrual for the current project. Choose File→Options. In the Project Options dialog box, choose Schedule. Under "Calculation options for this project", in the "Default fixed cost accrual" box, select Start, End, or Prorated. This setting takes effect for all new tasks you create.


Although you can enter fixed costs easily enough, there's nothing that makes you explain what the cost is for. Unless it's stunningly obvious, a notation about the cost is always a good idea. A task note,  is one way to describe a fixed cost. If you have multiple fixed costs throughout your project, consider using a custom text field instead. After you create the custom field , add it to the Cost table next to the Fixed Cost field so the fixed-cost description sits right next to the cost it describes.

Summary tasks can have fixed costs, too. Entering a fixed cost on a summary task is helpful when a cost corresponds to a project phase, rather than just an individual task. Add fixed costs to a summary task in the same way you add them to regular tasks.

You may wonder how you can add a fixed cost to a summary task. The other cost fields, like Total Cost, roll up subtasks' values to calculate the corresponding cost for the summary task. However, as shown in Figure 4, Project doesn't roll up the Fixed Cost field, which can be both convenient and perplexing.

Figure 4. If you expect fixed costs to roll up in the summary task, you'll be disappointed by the summary task Fixed Cost field showing $0.00. The benefit of Fixed Cost not rolling up is that you can add fixed costs to project phases. Fixed costs do become part of the Total Cost field, which also includes any work and material resource costs.

You can also enter a fixed cost for the project as a whole. To do this, you must first show the project summary task. Choose Format→Show/Hide, and then, turn on the Project Summary Task checkbox. Apply the Cost table as usual, and then, in the project summary task, enter the fixed cost.

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