2.4Project Costs & Budget
The essentials in 30 seconds
- As soon as resources have a rate and are assigned, Project calculates costs automatically: task cost = (rate × work) + material resources + cost resources + fixed costs.
- The Cost table shows the cost per task; the project summary gives the total cost — cost columns are not visible in the default Entry table.
- You refine with fixed cost (a lump sum on a task) and cost resource (a reusable one-off expense); tracking will then compare planned, actual and baseline (level 3).
Running mini-case — Meriem establishes the project budget
Meriem, project manager at an engineering & construction (BTP) company in Algiers, must present the client project budget to her management. She has entered the rates and assigned the resources: Project therefore calculates the cost of each task on its own. She displays the Cost table (View > Tables > Cost) and reads the planned cost per task, then the total cost on the project summary row. To refine, she adds a fixed cost to 'Site setup' (the rental of a site compound, as a lump sum) and a cost resource 'Travel' for one-off expenses. She identifies the most expensive phases to prepare budget tracking. Finally, she knows that comparing this planned cost with actuals and the baseline will come at level 3.
Standalone case for this section: it comes back in the lesson, the diagram, the script and the 48h challenge of section 2.4.
1. Automatically calculated costs
A project is also managed by budget. As soon as resources have a rate and are assigned, Project automatically calculates costs: task cost = sum of (rate × work) + cost of material resources + cost resources + any fixed costs. Meriem visualises everything with the Cost table; the project summary gives the total cost.
2. Refining and tracking
You can refine: add a fixed cost to a task (a lump-sum expense), use cost resources for one-off expenses, and manage several rate tables per resource. For budget tracking, you will later compare this planned cost with the actual cost and the baseline (level 3).
3. Economic management
Mastering costs makes Project an economic management tool. Meriem knows that without a rate entered, work cost stays at zero even with assignments, and that cost columns do not show in the default Entry table: she opens the Cost table properly.
🔎 Concrete example — 🔎 Concrete example — Fixed cost vs cost resource
Two ways to spend: Meriem chooses the right mechanism.
Lump sum attached to ONE task (machine rental) -> FIXED COST.
Reusable one-off expense (travel) -> COST RESOURCE.
-> both add to the cost of work hours.
Reading : fixed cost = per task; cost resource = cross-cutting
Reflex : no rate, no costReading: a fixed cost is attached to a task; a cost resource is tracked like an 'expense line' across the project.
Lesson: both add to the cost of work hours to give a complete budget, per task and total.
Section vocabulary
- Task cost
- Sum of the resources' (rate × work) + material costs + cost resources + any fixed cost.
Simple example: Meriem reads the planned cost of the 'Structural studies' task.
What it is not: a simple duration in days, with no financial dimension.
Reflex: rate × work + the rest → the task cost.
- Fixed cost
- Lump-sum expense attached to a task, independent of resources and time (e.g. equipment rental).
Simple example: Meriem enters a fixed cost for the site compound.
What it is not: a reusable expense tracked across several tasks.
Reflex: lump sum on a task → fixed cost.
- Cost table
- Set of columns showing costs per task (planned cost, actual, remaining, variance).
Simple example: Meriem displays the Cost table to see the budget per task.
What it is not: the Entry table, where cost columns do not show.
Reflex: see costs → the Cost table.
- Rate table
- Set of rates for a resource (up to five), allowing different prices depending on context.
Simple example: Meriem defines a higher hourly rate for night work.
What it is not: a fixed cost set directly on a task.
Reflex: different prices depending on context → rate table.
- Total project cost
- Sum of the costs of all tasks, readable on the project summary task.
Simple example: Meriem reads the total cost at the top of the summary.
What it is not: the cost of a single isolated task.
Reflex: overall budget → the total project cost.
In practice — In practice — Calculating and tracking costs
- Check that your resources have a rate entered (section 2.1), then display the Cost table (View > Tables > Cost), like Meriem.
- Observe the calculated cost per task (rate × work) and the total cost on the project summary.
- Add a fixed cost to a task (a lump-sum expense) and a cost resource for a one-off expense.
- Identify where costs concentrate (most expensive tasks or phases) to prepare budget tracking.
Step-by-step script — establishing the budget like Meriem (5 min)
1) Check the rates in the Resource Sheet (no rate, no cost). 2) Display the Cost table (View > Tables > Cost). 3) Read the planned cost per task, then the total cost on the project summary. 4) Add a fixed cost to 'Site setup' and a cost resource 'Travel'. 5) Identify the most expensive phases to prepare tracking.
Cost columns are not visible in the default Entry table: make sure you display the Cost table.
Copy-paste template — my budget sheet
Task cost = (rate x work) + material + cost resource + fixed cost
Cost table : planned / actual / remaining / variance
Project summary : TOTAL COST
Fixed cost : lump sum on ONE task (machine rental)
Cost resource : reusable one-off expense (travel)
Rule: no rate -> work cost at zeroLump sum on a task
Meriem enters a fixed cost for machine rental on a specific task.
One-off expense
Meriem creates a cost resource 'Travel' that she assigns to several tasks.
Rates depending on context
Meriem manages a rate table with a higher rate for night work.
Spotting expensive items
Meriem reads the Cost table and identifies the most expensive phase to prepare budget tracking.
✓ Best practices
- Enter the rates so that costs are calculated.
- Display the Cost table to see the cost columns.
- Distinguish fixed cost (per task) from cost resource (cross-cutting).
✗ Common pitfalls
- Forgetting the rates → costs at zero.
- Looking for costs in the Entry table (invisible).
- Mixing fixed cost and cost resource without logic.
Key takeaways
- Project calculates costs automatically: (rate × work) + material + cost resources + fixed costs.
- The Cost table shows the cost per task; the summary gives the total cost.
- You refine with fixed costs (lump sums) and cost resources (one-off expenses).
- Budget tracking then compares planned cost, actual and baseline (level 3).
48h challenge — apply it tomorrow
Like Meriem, display the Cost table of your project and record the planned cost of two tasks as well as the total cost from the summary. Add a fixed cost to a task (a lump sum) and a cost resource (a one-off expense), then explain in one sentence the difference between the two and why their amounts add to the cost of work hours.
- I know where to read the cost of a task and the total project cost.
- I distinguish fixed cost and cost resource and use them appropriately.
- I understand that without a rate, the budget stays at zero.
Frequently asked questions
My costs are at zero although I have assigned resources. Why?
Your resources probably have no rate entered: work cost is calculated as rate × work. Enter the rates in the Resource Sheet and check that you are displaying the Cost table.
How do I include an expense not linked to working time (purchase, lump sum)?
For a lump sum attached to a task (machine rental): a fixed cost in the Cost table. For a reusable one-off expense (travel, subcontracting): a cost resource assigned to the relevant tasks. Both add to the cost of work hours.
A project's costs are at zero despite assigned resources. Why?