Almost all projects have some financial aspect, and cost limits
the scope of many projects. Tracking and managing cost information
allows the project manager to answer such important questions as the
following:-
What is the expected total cost of the project based on our
task durations and resource assignments?
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Are we using expensive resources to do work that less
expensive resources could do?
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How much money will a specific type of resource or task cost
over the life of the project?
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Are we spending money at a rate that we can sustain for the
planned duration of the project?
You can enter standard rates and costs per use for work and
material resources, as well as overtime rates for work resources.
When a work resource has a standard pay rate entered and
is assigned to a task, Project calculates the cost of the assignment.
Project does so by multiplying the assignment’s work value by the
resource’s pay rate—both using a common increment of time (such as
hours). You can then see cost per resource, cost per assignment, and
cost per task (as well as costs rolled up to summary tasks and the
entire project plan).
Project handles overtime expenses differently. Project will
apply the overtime pay rate only when you specifically record overtime
hours for an assignment. Project does not
automatically calculate overtime hours and associated costs because
there’s too great a chance that it would apply overtime when you did
not intend it. In the new book launch project plan, Jun Cao’s working
schedule provides a good example. In the next exercise, you will set
up a working schedule of 10 hours per day, four days per week for Jun.
This is still a regular 40-hour workweek, even though 2 hours per day
could be mistaken for overtime with the normal assumption of an 8-hour
day.
In addition to or instead of cost rates, a resource can include
a set fee that Project accrues to each task to which the resource is
assigned. This is called a cost per use. Unlike cost rates, the cost
per use does not vary with the task’s duration or amount of work the
resource performs on the task. You specify the cost per use in the
Cost/Use field in the Resource Sheet view.
In this exercise, you enter standard and overtime pay rates for
work resource.
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In the Resource Sheet,
click the Std. Rate field for
Jun Cao.
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Type 42 and press
Enter.
Jun’s standard hourly rate of $42 appears in the Std. Rate
column. Note that the default standard rate is hourly, so you did
not need to specify cost per hour.
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In the Std. Rate field
for Sharon Salavaria, type 1100/w and press Enter.
Sharon’s weekly pay rate appears in the Std. Rate
column.
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Enter the following standard pay rates for the given
resources:
As you can see, you can enter pay rates with a variety of
time bases—hourly (the default), daily, weekly, and so on. In
fact, you can enter pay rates in all the increments of time for
which you can enter task durations—from minutes to years.
Next, you will enter an overtime pay rate for one of the
resources.
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In the Overtime Rate
field for Jun Cao, type 67, and then press Enter.
Tip
If you work with a large number of resources who have the
same standard or overtime pay rates, you can set up Project to
apply these pay rates automatically whenever you add a new
resource. You do this in the Advanced tab of the Project Options
dialog box, which is accessible from the File tab.
