Planning Fixed Costs for Tasks

You might have a task cost that’s independent of any resource. For example, the performance of a task might include costs for printing reports for a customer review meeting or the purchase of an external hard drive for transferring the files for the development of a deliverable from one resource to another. Such a task cost can be a “miscellaneous” or incidental cost on the task. If the cost does not need to be tracked as its own category, or if it’s only going to be incurred for a single task in the project, it might be a good candidate to be entered as a fixed cost for a task.

To enter a fixed cost for a task, follow these steps:

  1. Display the Gantt Chart or other task sheet.

  2. On the View tab, in the Data group, click Tables, and then click Cost.

    The Cost table, which includes the Fixed Cost and Fixed Cost Accrual fields, is applied to the task sheet, as shown in Figure 9-7.

    Why Use Cost Resources?

    In Microsoft Project 2003 and earlier versions, project managers sometimes created work resources such as “Airfare” or “Lodging,” with the cost entered in the Cost/Use field. However, the cost could only be a rough estimate if the same resource was to be used for multiple tasks. The alternative was to create a different “Airfare” resource for each instance in which it needed to be used. In addition to being cumbersome, this approach was problematic because it was a work resource, and as such, it adversely affected scheduling. Such a resource had a work calendar, and adding or removing it to a task could change duration or work scheduled for that task.

    With cost resources, you can create a resource that is completely independent of task scheduling. You can assign the cost resource to one or more tasks, enter the cost for that resource on each individual task, and then track it thereafter very neatly and accurately.

    But then, why not simply enter a fixed cost for a task? Entering fixed costs for tasks does not affect scheduling, and the costs roll up nicely into the project cost summary.

    The advantage of using a cost resource instead of a fixed cost for a task is that you can assign multiple cost resources to a single task, whereas you can enter only one amount as a fixed cost for a task. For example, you can assign the “Airfare,” “Car Rental,” and “Hotel” cost resources to the “Train customer service staff in Dayton” task. This gives you more control, and therefore more accurate cost information, when you apply different types of costs to tasks.

    Entering a fixed cost is still quite useful when you want to enter a cost that doesn’t need granular tracking or to be summarized with others of its kind. If there’s a one-off type of cost associated with the performance of a task, it’s still a good technique. But if you have certain costs that you want to track individually or that are used by different tasks throughout the project, the cost resource is the most flexible and accurate alternative.

    Apply the Cost table to enter fixed costs for tasks.

    Figure 9-7. Apply the Cost table to enter fixed costs for tasks.

  3. In the Fixed Cost field for the task, enter the cost.

  4. In the Fixed Cost Accrual field, specify when the cost should be accrued: at the beginning of the task, at the end, or prorated throughout the duration of the task. The planned fixed cost for the task is added to the planned cost for the task as derived from the cost of assigned resources and is shown in the Total Cost field.

Note

To set the default fixed cost accrual method, on the File tab, click Options, and then click Schedule in the left pane. Under Calculation Options For This Project, select your preferred default accrual method in the Default Fixed Costs Accrual box. This default accrual method applies only to fixed costs for tasks in this project, not the resource costs.

You can also enter a fixed cost for the project as a whole. To do this, follow these steps:

  1. Display the Gantt Chart or other task sheet.

  2. Click View, Table, Cost.

    The Cost table is applied.

  3. On the Format tab, in the Show/Hide group, select the Project Summary Task check box.

    The project summary task row appears at the top of the view and includes rolled-up costs for tasks. (See Figure 9-8.) By default, the name of the project summary is the same as the project file name. However, you can click in the Task Name field and rename it.

    Add the project summary task to add a fixed cost for the entire project.

    Figure 9-8. Add the project summary task to add a fixed cost for the entire project.

  4. In the Fixed Cost field for the project summary task, enter the fixed cost for the project.

  5. In the Fixed Cost Accrual field, specify when the cost should be accrued: at the beginning of the project, at the end, or prorated throughout the duration of the project.

    The planned fixed cost for the project is added to all other costs calculated for assignments and tasks throughout the project. This total is shown in the Total Cost field of the project summary task.

As you see, when you enter a fixed cost for a task or the entire project, all there is to do is enter the amount. You’re not asked to enter what the cost is for, so it’s a good practice to document the fixed cost by entering a note. To enter a note about a fixed cost, follow these steps:

  1. Select the task (or the project summary task) for which you entered a fixed cost.

  2. On the Task tab, in the Properties group, click Notes.

    Add the project summary task to add a fixed cost for the entire project.

    Notes

  3. On the Notes tab in the Task Information (or Summary Task Information) dialog box, enter a note that explains the fixed cost.

To review notes that have been entered on a task, select the task. On the Task tab, in the Properties group, click Notes again. In many tables, including the default Entry table, the notes icon appears in the Indicators column. Rest your mouse pointer over the notes indicator to read the note, as shown in Figure 9-9. You can also double-click the notes indicator to open the Notes tab in the Task Information dialog box.

Rest your mouse pointer over the notes indicator to read the note explaining details about the fixed cost.

Figure 9-9. Rest your mouse pointer over the notes indicator to read the note explaining details about the fixed cost.

Troubleshooting: The rolled-up value for fixed costs for tasks looks wrong

If you have fixed costs for individual tasks, and possibly a fixed cost for the project as a whole, these values are not rolled up into the project summary task or outline summary tasks.

Instead, the fixed costs for tasks and any resource costs are calculated and displayed in the Total Cost field for the individual tasks. In turn, the Total Cost field is rolled up in the project summary task, and that’s where you can see project cost totals. (See Figure 9-10.)

Fixed costs are not rolled up into summary tasks or the project summary task, which enables you to enter a fixed cost for a phase or the project as a whole.

Figure 9-10. Fixed costs are not rolled up into summary tasks or the project summary task, which enables you to enter a fixed cost for a phase or the project as a whole.

The reasoning is that you might need to enter a fixed cost for a project phase, represented in a summary task. Likewise, you might need to enter a fixed cost for the project as a whole. Not rolling up totals in the Fixed Cost field lets you do this, although at first glance the numbers look wrong. Keep your eye on the Total Cost field instead. Just be aware that the Total Cost field sums resource costs in addition to any fixed costs.

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