Project 2016 for Beginners Part 18: How to Set Costs for Tasks in Microsoft Project 2016 Video Lecture | MS Project: Become an Expert - Management

Hello again and welcome back to our course
on Project 2016.
In this section we’re going to start to
look at Costs.
And I’m going to begin by looking at the
bathroom refit project.
We’re going to look at some basic aspects
of costs in this project.
Then I’m going to set you Exercise 05 to
do, put in a little bit more detail about
cost in relation to the bathroom refit.
And then in the section after that we’re
going to look at a couple of other more general
aspects of cost and we’re going to also
look at the cost for the wedding.
So first of all let’s look at the cost for
the bathroom refit.
And what I’m preparing here is version 05A
of the bathroom refit project.
And I’m going to go to the Resource Sheet
and we’re going to look first of all at
the cost related to the electrician.
Now for work resources, generally, basically
we would need at least a standard rate for
a cost.
And by default cost rate is entered in currency
units per hour.
You can express it, for instance, in cost
per day but we’ll stick with per hour.
And I’m going to put the electrician cost
as $25 per hour as a standard rate.
That’s the STD column.
And I’m going to put it as $40 per hour
for the overtime rate.
Now as soon as I do that if I go back to the
project itself, so let me just switch back
to the Gantt Chart.
There’s not really any noticeable different
on that at all.
But if I go to Project Information on the
Project Tab and click on the Statistics button
I’ll now see that I’ve got for the first
time a cost for the bathroom refit.
And it comes out, currently, at $800.
Now the reason it’s $800 is of course because
the electrician is scheduled to do 32 hours
of work on the project.
So the first fix electric is two days work.
That’s 16 hours at $25.
That’s $400.
And then the second fix electric is the same
amount, another $400.
So let’s close that and let me return to
the Resource Sheet.
Now let’s take a look at a couple of other
aspects of the cost of a work resource.
We also specified here an overtime rate.
And if for example I needed to get the electrician
to work overtime, so to work outside the electrician’s
normal hours of work then that is the rate
I would need to pay the electrician at.
This difference between standard rate and
overtime rate can of course be very significant
because it may increase the cost of, for example,
keeping a project on time that is starting
to slip.
And sometimes you have to balance the cost
of a delay against the additional cost of
keeping on schedule.
Cost per use relates to an additional cost
for each time you might need to use a resource.
This may apply to a work resource.
So you may, for instance, have an agency hiring
fee to pay or something like that.
But it also could relate, for example, to
a piece of equipment, the delivery cost of
a pump or a special piece of machinery.
The next column is the accrue column or the
accrue at column.
And this basically relates to how you accrue
a particular cost.
Now this will often relate to when you pay
for it.
Do you pay for it up front?
Do you pay for it as the work progresses?
Do you pay for it at the end?
And if I click on Accrual and click on the
dropdown I’ve basically got those three
options, Accrue at the start, Accrue prorated
throughout the duration of the task, or Accrue
at the end.
Now when it comes to company finance of course
the accrual will be handled probably by an
accountant or a team of accountants.
But in a smaller project it can be as simple
as saying when do I have to pay for this?
Now very often on a small job like a bathroom
refit you may have already agreed with the
contractor that you’re going to pay at the
start or perhaps by installments as you go
or pay at the end.
So on this occasion I’ve agreed to pay the
electrician at the end so I’m going to put
Accrue at end.
The next column determines which calendar
is used by the particular resource.
We haven’t looked at calendars at all yet.
We’re going to be looking at them in a few
sections from now.
But basically by default we have a five day
week, eight hour day working calendar.
But a particular resource may have a different
calendar.
So for instance, this electrician may only
be available Mondays, Tuesdays and Wednesday
or may have different hours of work, perhaps
starting earlier or finishing later than the
rest of the people working on the project.
If the resource in this case the electrician
does have a different calendar I can specify
it here.
And when Project is doing its scheduling it
will use the resources calendar rather than
the default one for the project.
But as I say, more on that later.
So having put in the cost of the electrician
and bearing in mind that I’m going to get
you to setup the costs for the plumber and
the contractor as part of Exercise 05, let’s
look now at some of the materials on the bathroom
refit.
And we’re going to start with the flooring.
Now I’m going to fit floor tiles.
The type of resource is material.
And the material column specifies the unit
that this material is measured in.
Now it’s going to be measured in square
meters, perhaps the initials.
And the standard rate will be the cost of
one of the material units.
So this is the cost of one square meter of
floor tiles which we’re going to set at
$36.
Now in the case of the floor tiles we’re
going to have to pay for those up front.
So we’re going to put in here an accrual
of Start.
Now note cost per use in this case might,
for example, be a delivery cost.
Now let’s go back to the Gantt Chart.
Let’s find the task Select and order flooring
and let’s assign the floor tiles to that
task.
Floor tiles are here.
And the number of units that we need, we need
12 square meters of floor tile.
So I put 12 in here, click on Assign.
Note the cost there, $432.
Close that and that’s another additional
cost.
Note that the cost itself doesn’t appear
in the Gantt Chart on the right but the assignment
of the floor tiles resource does.
Notice also that we’re going to have similar
costs for the wall tiles here, Select and
order wall tiles, Select and order paint,
and Select and order equipment.
So we’ve entered some of the costs associated
with this project.
Exercise 05 is going to involve you in entering
some more.
And it’s Exercise 05 that I’m going to
cover in the next section.
Please join me
for that.