Creating and Using Alternate Cost Rates in Microsoft Project

In this blog post article, I’m going to show you how to create and use alternate cost rates for your resources in Microsoft Project. Suppose that you have a project team member named Calvin Baker, who has different cost rates depending on the type of tasks to which he is assigned. For instance, Calvin might have a default rate of $30 per hour for documentation tasks, but a higher rate of $50 per hour for QA-related tasks. Let me walk you through how to set this up.

If you would rather watch a YouTube video on this subject, click here or click the thumbnail below.

A group of apples and oranges

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Setting Up Alternate Cost Rates

Here’s how to set up alternate cost rates for a resource:

  1. Open your project in Microsoft Project.
  2. Navigate to the Resource Sheet view where you manage your project’s resources.
  3. Double-click the name of the resource for which you want to set up alternate cost rates. Microsoft Project will open the Resource Information dialog.
  4. Click on the “Costs” tab within the Resource Information dialog to view the cost details.
  5. On the Costs page, you will see several cost rate tables labeled as A (Default), B, C, D, and E. These are the available cost rate tables. Select Cost Rate Table B (or any other appropriate table) for setting the alternate cost rate.
  6. Enter the alternate cost rates in the Standard Rate and Overtime Rate fields.
  7. Click the “Notes” tab and enter a note to explain how to use the alternate cost rates for the resource.
  8. Click the “OK” button to save the changes to the resource’s alternate cost rates.

Applying Alternate Cost Rates to Tasks

Here’s how to apply the alternate cost rate after you have assigned the resource to a task:

  1. Apply the Resource Usage to manage assignments and costs more effectively.
  2. To better organize the tasks, display the “View” ribbon, click the “Group By” pick list, and select “Assignments Keeping Outline Structure.” This helps distinguish between different types of tasks.
  3. Right-click on the Work column header, choose “Insert Column” on the shortcut menu, and then select “Cost Rate Table” to display which cost rate table each task is currently using. Using this method, also insert the “Cost” column to see the calculated costs for each task.
  4. Identify the tasks to which the resource is assigned. You will notice that by default, these tasks are using Cost Rate Table A, which is the default value in the Cost Rate Table field.
  5. Change the Cost Rate Table value from A to B (or to your chosen alternate table). This action updates the cost calculation based on the new alternate cost rate.
  6. Use the fill handle (like in Excel) to apply the Cost Rate Table value to all relevant tasks.

That’s it! You’ve now successfully set up and applied alternate cost rates for resources in Microsoft Project.

If you have questions, please add them in the “Leave a Reply” section below. Or if you watched the video, add your questions or comments there. Please subscribe to my YouTube channel and leave “Likes” if you like the videos.

If you would like to have a formal class on using Microsoft Project, here is a link for my classes.

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