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Cost and Income Calculations in RiskyProject

You can define cost and income associated for tasks with risks and uncertainties. You can use income to perform an analysis of the full life cycle of a project. Profit is calculated as the difference between income and cost. This will affect the way that RiskyProject shows data in the Cost and Cash Flow views. If the project has income, all cost and cash flow data is now shown as revenue where costs are a negative value. In these cases, it is possible that a project will have negative profit.
The example below illustrates how fixed and variable (resource) costs are calculated with respect to tasks and subtasks:

Project risk analysis: cost and income calculation

The project schedule includes the summary task "Web Site Design", the summary task "Art Works", and subtasks "Selection of art work" (2 days duration) and "Purchase of art work" (0.2 days duration). "Selection of art work…" has base fixed cost $200 and is assigned to the Graphic Artist with rate $50.00/hour. "Purchase of art work" has a base fixed cost of $400 and is performed by Purchaser with a rate of $40.00/hour. The work is supervised by project manager with rate $80.00/hour, but is only 10% his time is assigned to this project. It is assumed that a day has eight (8) working hours.

Project risk analysis: cost and income calculation

The Fixed cost for the summary task is calculated as the sum cost of all subtasks, which do not have subtasks under them. Resource costs for summary tasks are calculated as cost of all resources assigned to summary task plus resource cost of all subtasks.

A. Calculation of base fixed cost for summary task "Web Site Design":
Base fixed cost for "Selection of art work…" (Task 3) = $200.00
Base fixed cost for "Purchase of art work" (Task 4) = $400.00
Total = $600.00

B. Calculation of variable (resource) cost for summary task "Web Site Design":
Resource cost for project manager = 17.6 hours * $80/hr / 10 = $140.80
Resource cost for Selection of art work (Task 3) 16 hours * $50/hr = $800.00
Resource cost for Purchase of art work (Task 4) = 1.6 hours * 40/hr = $64.00
Total = $1004.80

Income is calculated similarly to cost calculation. Income cannot be assigned to the resources.

See also

Setting up cost defaults

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