Assigning fixed costs

This chapter has, to this point, focused on resources, and you have learned how to assign costs to a resource. But the costs of some tasks need to be calculated differently. In Project, you can assign a fixed cost to a task or you can assign a fixed resource cost to a task.

Assigning a fixed cost to a task

Some tasks are fixed-cost tasks, that is, you know that the cost of a particular task stays the same regardless of the duration of the task or the work performed by any resources on the task. For example, your catering service, as part of each job, washes linens. You own the washing machine, and you've done the calculation on the amount of water plus electricity used (plus wear and tear) each time that you run the machine for a wash cycle. Or, you're renting a site for a meeting for a flat fee. In cases like these, you assign the cost directly to the task. If you assign a cost to a task, Project adds the fixed cost of the task to the cost of any resource work that you assign to the task when calculating costs for the project.

Note Remember that assigning a fixed cost to a task does not necessarily make the total cost of the task equal to the fixed cost that you assigned. You can, for example, assign more than one fixed cost as well as variable costs to a task.

To assign a fixed cost to a task, use the Gantt Chart view and apply the Cost table. Follow these steps:

1. Use the View bar or the View menu to switch to the Gantt Chart view.

2. Choose ViewOTable:EntryOCost to switch to the Cost table view of the Gantt Chart, as shown in Figure 5-18.

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Figure 5-18: Use the Cost table view of the Gantt Chart to assign costs to tasks.

Figure 5-18: Use the Cost table view of the Gantt Chart to assign costs to tasks.

3. Select the task to which you want to assign a fixed cost.

4. Type the cost for that task in the Fixed Cost column, and press Enter.

You can control the way that Project accrues the fixed cost for a task from the Fixed Cost Accrual column. Your choices are Start, Prorated, and End. These choices have the same meaning as the accrual choices for resources that were discussed in the section "Creating a Resource List," earlier in this chapter.

Tip To control the way that Project accrues all fixed costs, use the Calculation tab of the Options dialog box (choose ToolsoOptions).

Assigning a fixed resource cost to a task

Suppose that you hire a consultant to perform a task for a fixed amount of money; you can assign the consultant to the task as a fixed-cost resource. Follow these steps to assign a fixed resource cost to a task:

Note Project Help suggests an alternative method to assign a fixed resource cost to a task; I prefer the method described below, because the method in Project Help can have some undesirable side effects: when you assign only one resource to the task, Project turns the task into a Milestone; the duration of the task is lost; and Project won't apply future resource rate or availability changes to the task to which you assigned the fixed cost resource.

1. Set up the resource in the Resource Sheet view. If the resource has some sort of "per unit" cost (an hourly or daily rate), assign that rate in the Std. Rate field. Otherwise, assign a standard rate of $0 as I did in Figure 5-19. Supply the fixed-cost amount in the Cost/Use field.

2. Use the View bar or the View menu to switch to the Gantt Chart view.

3. Choose ViewOTableOCosts to switch to the Cost table view of the Gantt Chart.

Tip Switching to this table enables you to see the impact on the cost of the task when you assign the resource.

4. Select a task from the Task Name column.

5. Assign the resource to the task by using the steps that were presented in the section "Assigning resources to tasks," earlier in this chapter. Don't worry about the number of units that you assign; the cost is a "per use" cost, so Project will assign the value you assigned in the Cost/Use field in Step 1, regardless of the number of units you assign.

Figure 5-19: Setting up a fixed-cost resource.

Project adds a fixed-resource cost to other resource costs when calculating the total cost of a task, but the cost does not depend on the time that a resource spends working on the task.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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