The Resource Sheet and Resource Names column In Microsoft Project are great for assigning labor and material generic resources to a schedule. However, if you have a subcontractor doing all the work on a task at a fixed price or you have a material that is specific to your project, then you may want to use a fixed expense to describe the associated cost.
In this situation, you have scheduled and have assigned labor resources to all the tasks. The only outstanding issue is a project specific material cost that needs to be assigned to the installation task. Microsoft Project provides a way to describe this project specific material expenses in the schedule.
This article discusses the assignment of a project specific material expense to the schedule using Microsoft Project. Another article entitled “Microsoft Project: Adding Generic Labor Resources to a Project” discusses the assignment of generic labor resources. All examples shown in this article are using Microsoft Project 2013, however the features described are available in most recent version of Microsoft Project.
Microsoft Project Example
The project is a straight forward heat exchanger repair project. We are replacing the damaged tubing in the heat exchanger as displayed in the schedule, Figure 1.
The activities are all sequential and have the classic Finish-to-Start relationship. We have assigned resources to all the activities from your global list of generic resources, again, Figure 1. We would like to describe the large expense of the heat exchanger tubing that needs to be installed. As this tubing is unique to this particular damaged heat exchanger we do not want to list it as a global generic material resource. Rather we want to list it as a line item project specific material expense. How do we do this?
Microsoft Project has a default cost table for entering and tracking costs related to your project. To view this cost table select the View tab, Data ribbon group, Tables drop down menu, and Cost option, Figure 2.
Note a few things on the cost table, Figure 3.
First, there are currently no Fixed Costs associated with the project. Second, generic labor resource expenses along with other expenses are listed in the Total Cost column. Third, the baseline values are all zero because the baseline has not yet been set.
Defining a Project Specific Material Expense
To define the material expense for the heat exchanger tubing simply enter the tubing Fixed Cost ($14,000) in the cell associated with the Install Heat Exchanger Tubing task, Figure 4.
In the next column over describe the Accrual of the Fixed Cost. In other words, when will the cost of the heat exchanger tubing be invoiced: Start, Prorated, or End. In our example the Heat Exchanger Tubing will not be invoiced until after the quality assurance inspection, so select End for the Fixed Cost Accrual, again, Figure 4. After entering the Accrual we are done! We have defined your Fixed Cost for the heat exchanger tubing.
Set the Baseline Costs
Once all the labor resources and fixed costs defined for the project, we now want to set the cost baseline. To set the baseline costs select the Project tab, Schedule ribbon group, Set Baseline drop down menu, and Set Baseline option, Figure 5.
This brings up the Set Baseline dialog, Figure 6.
Set the baseline for the entire project, as shown in Figure 6. Now the Tubing Fixed Cost is included with the baseline cost, Figure 7.
Now change the Table view to Entry, again. Insert an additional column for Fixed Cost, Figure 8.
Note also the Cost column, which is the total cost of each task and the total cost of the project.
Sometimes you have a project cost that is a lumped sum fixed price cost. For this type of cost you do not have to get into the details of labor rates and corresponding assignments. Microsoft Project has a way for you to enter this fixed cost directly in the Cost table or by inserting a Fixed Cost column in your tasks view.
Either way your fixed price cost will be included in your total costs. This includes generic labor and material resources along with your fixed price cost. Set the cost baseline, and you are ready to track project costs as your schedule progresses.