Introduction to costs
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- Costs which result from assigning a resource to a task. This could be the salary of a software engineer, or the unit cost of stone slabs plus their delivery charge.
- Costs which are assigned directly from a cost centre to a task. A direct cost could be payment for a new office alarm system, rent for warehouse space which varies depending on how long the warehouse is rented for, or installation charges which vary depending on how many units have to be installed. You can show all your costs as direct costs if you choose not to use resources in your plan.
Costs can represent either income to a cost centre or expenditure from a cost centre. Examples of expenditure are payment for materials, payment of employees' salaries and purchasing new equipment. Examples of income are cash investment into a project and receipt of payment for work done. At the start of a project you might want to make an allocation of income to show the amount of money available at the project's outset.
A task can generate both an income cost and an expenditure cost. For example, the task of translating a report for a customer would have the cost of paying an employee to translate the report and any overhead costs such as heating and lighting the workplace, but the task would also generate income because the customer pays for the finished translation.
Most costs and income will be positive, but you can also record negative cost or income.
Working with permanent resource costs