Project cost is defined as the approximate (estimated) cost of all resources (people, materials and equipment) consumed by the performing organization necessary to achieve the project deliverables.
Using this information it is possible to build a project resource sheet, such as illustrated in the table above.
-Resource names can be individuals or generic.
-Resources should be coded uniquely.
-Resources must be grouped for hours.
-Rates must be assigned to generate cost information.
-Max. average Availability per day to work on this project only.
An example of estimating the cost of a task could be:
-to develop a software module in 10 days
-2 resources available (given on a unit effort per day) :
-a programmer @ 20% per day, at a rate of $50/hour.
-a contractor @ 10 hours per day, at a rate $70/hour.
Calculating Total Effort = 116 hours
-programmer: 20% of 10 days = 2 days = 16 hours
-contractor: 10 hours/day per 10 days is 100 hours
Calculating Total Cost = $7,800.00
-programmer: $50/hour x 16 hours= $ 800.00
-contractor: $70/hour x 100 hours= $7,000.00