Project costs” are any expenditures made or estimated to be made, or monetary obligations incurred or estimated to be incurred, by a municipality which are listed in a project plan as costs of public works or improvements within a tax incremental district, plus any costs incidental thereto, diminished by any income, special assessments, or other revenues, other than tax increments, received, or reasonably expected to be received, by the municipality in connection with the implementation of the plan.
- Many charities and not for profit organizations draw a distinction between what they call core costing and project costing
- In charitable organization, some funders will not provide the total costs of delivering a project, restricting their contribution to overheads to a small additional percentage of the direct cost.
- The challenge for voluntary organizations then is to be able to calculate the real cost of each project or program.
- For project costing, the calculation of total project cost is straightforward – it is simply the direct costs associated with that project plus its share of the staff costs plus its share of the overhead costs
- It should be fairly simple to identify the direct costs for each project or program
- The costs of renting equipment,
- Hiring trainers
- Undertaking a survey
- Travel costs, or
- Printing costs.
- In the annual accounts, these will probably be shown as a single figure, but in the management accounts they need to be allocated to the correct projects.
- You need to know your staff costs for each project.
- Calculate a daily rate for each person (or for each grade) by taking the salary costs plus
- Assess the number of days of each person for each project or program, and therefore the staff cost, to add to the budget for that project or program.
- The total overheads should be calculated-in practice; you will probably do this as part of your budgeting process at the beginning of each year.
- Ensure that you do include all the costs – including depreciation and the costs of non-chargeable staff time.
- Ideally the overhead costs should be spread fairly over all of the projects, so raising funds for the projects will also ensure that all the overhead costs are covered.