A couple of weeks ago, I spent some time figuring out how actual costs were calculated within Microsoft Project. That ended up being a series of 3-4 blogs posts, which I felt captured the meat of the discussion.
Well, over the weekend, I started playing with Microsoft Project again, and I realized that there’s a key bit of functionality in there which definitely adds to the discussion. I am not sure how it adds to the discussion, but it definitely provides another building block in our common understanding of some behind the scenes calculations.
In this case, I have a new blank project. I add a single 10 day task to this project.
I set the Fixed Cost for the activity to $10,000.
Now this is where it gets interesting. Watch what happens when I enter a “1” in the Actual Work column.
First, we see that Work is now populated with 80 hours – which makes sense. That’s 10 days X 80 hours = 80. Ok.
Next, we see that Actual Cost has now been calculated as $100 or 1% of the total Fixed Cost. For the record, our Actual Work comprises .0125 of the Work.
Now, I change the Actual Work to 2 hours. I would expect Actual Cost to change to $200.
Nope – I end up with $300.
What’s going on here? As far as I can tell, here’s the calculation being performed behind the scenes:
(Round(100*[Actual Work]/[Work])/100)*[Fixed Cost]
…which, if broken down, yields the following steps:
- Divide Actual Work by Work. In this case, with a 1 in the Actual Work, that yields .0125.
- Round that to the nearest hundredths. That changes .0125 to .01.
- Multiply that number by the Fixed Cost field: .01 * $10,000 = $100.
Let’s try that with 2 in the Actual Work column:
- 2/80 = .025
- Round .025 to .03
- .03 X $10,000 = $300.
…and our calculation seems to work consistently.