Estimate a Standard Project

Estimate a Standard Project

Overview

Before you start

To add an estimate for a standard project:

1. Open Project and Job Costing > PJC Transactions > Contract Maintenance.

Click here for help on the fields on the Contract Maintenance form.

2. Use the Finder or the navigation buttons beside the Contract field to select the contract you want to work with, or type the contract code in the Contract field.

3. Assign cost categories to the standard project.

   1. Expand the folder for the project (click the plus sign next to the project folder).

   2. Right-click the category folder, then click New Category on the menu that appears. The program displays the Category Maintenance form on the right side of the screen.

   3. In the Category field, enter the code for the category you want to add, or select it with the Finder.

   4. On the Estimates tab, select settings for the project category.

   The program displays default settings from the category setup record, but you can change them.

   5. Click the Accounts tab to check the accounts used for this category, and correct the accounts if necessary.

   6. Click Add on the Category Maintenance form, then click Save on the Contract Maintenance form.

   7. Click the New button next to the Line Number field to continue adding categories.

4. Add particular resources to the project.

   1. Right-click the resource folder (for example, Employee or Equipment), then click New [Resource] on the menu that appears.

   2. In the [Resource] Number field, enter the code for the resource you want to assign or select it using the Finder.

   3. Enter a comment for this resource, using up to 60 characters.

   4. Click Add on the [Resource] Category List, then click Save on the Contract Maintenance form.

5. For each resource you added in Step 4, in turn:

1. Select the resource on the contract tree.

2. Assign categories to the resource.

   1. Select the folder for the resource, right-click, then click New [Resource] Category on the menu that appears to display the [Resource] Category Maintenance form.

   2. For each cost associated with the use of the selected resource on this project:

   1. Enter or select the corresponding category code.

   2. Enter a description for the resource category.

   3. On a time and materials project or a fixed price project that uses the accrual-basis or billings and costs accounting method, select the billing type, if you do not want to use the default.

   If the project uses an item invoice type, you can also specify a different A/R item number.

   4. Change the projected start date and end date, if the start and end dates for the resource category are different from the project's start and end dates.

   5. Click the Add (or Save) button under the Estimates tab.

3. Enter an estimate for each resource category.

   1. Enter your estimate of the quantity and unit cost for the resource category.

   The unit cost and unit of measure from the resource setup record are used as defaults, but you can change them.

   If resource category is for material, you can use the Finder to select the cost for the material item at a particular Inventory Control location, or you can enter a different cost.

   Project and Job costing applies the following rules when determining the item cost.

   • If the item uses the Moving Average, FIFO, or LIFO costing method, the moving average cost is used for the estimate.

   • If the item uses the Standard costing method, the estimate also uses the standard cost.

   • If the item uses the Most Recent or User-Defined costing method, the estimate uses the most recent cost of the item.

   To calculate the extended cost, the program multiplies the specified quantity and the unit cost. If you enter a different extended cost for the resource category, the program recalculates the unit cost for the specified quantity when you leave the field.

   Note: You need to include in the cost amounts provision for any associated taxes. (Because the estimate may include both taxable and non-taxable costs, and costs that are subject to different tax rates, the program does not calculate tax for the estimate.)

   2. Accept or change any additional information that is required for the estimate, such as the billing rate, or the overhead and labor amounts or rates.

   For time and materials projects and for fixed price projects that use a billings and costs or accrual-basis accounting method, Project and Job Costing displays a billing rate according to the Default Billing Rate option specified for the Project. You can change the billing rate, and, if the project and category are both billable, you can change the billing type for a particular resource category.

   The program calculates a total revenue amount for the resource category according to the project type and accounting method.

   Project and Job Costing calculates the total revenue as follows:

   • For cost plus projects, total revenue is based on the cost plus percentage and the cost estimates you enter for each category.

   • For fixed price projects that use the completed project or the project percentage complete accounting method, total revenue is based on the markup percentage specified for the project and the estimated costs for the category.

   • For fixed price projects that use the accrual-basis or billings and costs accounting methods, total revenue is based on the billing rate and the quantity you enter for each category.

   • For time and material projects, total revenue is based on the billing rate and the quantity you enter for each category.

   Note: If a project uses a price list as the source for the default billing rate, Project and Job Costing initially estimates revenue using the price list and the quantity. You can change the billing rate for resource categories while the project has an Estimate status.

   3. If necessary, change the revenue amount for the resource category. If you change the revenue amount, the program recalculates the cost plus or markup percentage, or the billing rate.

   In a multicurrency system, you enter the revenue amount in your functional currency. The program converts the revenue amount to the customer's currency using the exchange rate specified on the project's Totals tab.

   4. When you finish entering the estimate for the resource category, click the Save button under the Estimates tab.

6. When you have finished adding estimates for the resource categories, click the Save button on the lower left-hand side of the Contract Maintenance form to save your changes to the contract.

After adding cost estimates

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