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Frequently Asked Questions

Use this section to help resolve problems and answer questions you may have concerning your burden setup and cost plus processing. For example, using this section, you can find out why Oracle Projects did not create a burdened cost distribution line for a particular expenditure item. Note that some questions may apply to Project Billing as well as Project Costing.

What characteristics should my Burden Cost Component Destination Project have?

You can set up the destination project with any project type, classifications, and other setup features. We do suggest that you make it an indirect project and use chargeability controls to prevent inadvertent charging to the project.

You can create one project for every project type that burdens costs and tracks burden costs on a separate project or, alternatively, create only one project but set up separate tasks to store costs for each project type. Either solution will work, because in each project type definition you specify a project and task as the destination for generated burden cost transactions .

Should I use unique expenditure types to map to burden cost components or should I add the expenditure type class of Burden Transaction to existing expenditures?

In the Burden Cost Codes setup window, you define each burden cost code to which you will be assigning a burden multiplier in your burden schedule. You also assign an expenditure type to each burden cost code. You may use any expenditure type that has been defined with the Burden Transaction expenditure type class or, if you want to account for the burden cost components in the GL or budget by burden cost component, you can define an expenditure type with the same name as the burden cost code. This would also enable you to view your generated burden costs by burden cost component, based on the unique expenditure type.

How can I see my generated burden cost transactions?

When you choose the option to generate separate burden cost transactions on the same project, you will have not only your original raw cost transactions on any particular task, but you will also have the new, generated burden cost transactions. When you view your project transactions in the Expenditure Inquiry window, the generated transactions will be distinguishable from the original transactions because they will have a raw cost of zero, with the summarized burden cost balance shown as the burdened cost. The burden cost transactions will also have the following characteristics:

What if I have to adjust my original expenditure after I've created these summary burden cost transactions?

While the burden cost transactions are summarized, all links to the original transactions are still maintained. Therefore, if you transfer or adjust the raw cost of the original transaction, the appropriate adjustment is also made to the summarized transactions. Remember, with the exception of billing adjustments, you cannot adjust the summarized transaction directly. See: Adjustments to Burden Transactions.

What is Burdening versus Mass Allocations?

Oracle Projects

Burden cost codes in Oracle Projects were designed for applying overhead expenses according to the burden contracting method used by government agencies in the United States. This method reflects a standard costing approach to applying overhead by defining codes and multipliers that will be applied on an ongoing basis as activity occurs. As a result, fully burdened project costs are visible on a timely basis at predictable multipliers which can be budgeted and therefore controlled. These fully burdened costs can then be posted to cost centers as a recovery against their actual costs. Variances to actuals can be monitored and burden multipliers adjusted as required. In addition, the cost center manager responsible for incurring the overhead costs can be held accountable for variances, rather than placing the responsibility on the project manager who does not control these overhead costs.

Oracle General Ledger

Oracle General Ledger Mass Allocations offers the more traditional full allocation of actual overhead expenses where no ongoing burdening method exists. These allocations are usually performed during the month-end process, resulting in a considerable delay in viewing these costs on projects. In addition, these allocations suffer from the unpredictable nature of overhead expenses which can fluctuate depending on when invoices are received. Consequently, they are very difficult to budget and control. If all of the overhead costs are always transferred to projects, then there is little incentive for the cost center manager to manage those costs.

How can I test my burden structure before processing?

You can use the View Burdened Costs window to test your burden structure before you begin processing costs.

You must have completed the cost plus implementation and assigned burden schedules to projects and tasks to use the View Burdened Costs form. See: View Burden Costs Window.

What if I do not include an expenditure type in a burden structure?

If Oracle Projects does not find an expenditure type in a cost base during burden processing, then the expenditure item is not burdened; the burdened cost is equal to the raw cost.

What if I do not include an expenditure type in the definition of my burden cost code?

Without an expenditure type, the Create and Distribute Summarized Burden Component Items process will fail, because the expenditure type is a key value in the expenditure item record.

Which burden schedule was used for my project?

Oracle Projects uses the following order of precedence when determining which schedule to use when calculating multipliers:

Oracle Projects uses this precedence when looking for a burden schedule for the three uses of burden schedules: internal costing, revenue accrual, and invoicing. See: Billing

Suggestion: Use the View Burdened Costs window to see which schedules are used for a particular project.

What date was used for a particular burden schedule version?

If the schedule type is firm, Oracle Projects uses the expenditure item date to determine which burden schedule to use for burden cost calculation.

However, if you entered a schedule fixed date for a firm burden schedule, then Oracle Projects uses the schedule fixed date to determine the effective burden schedule version.

If the schedule type is provisional, then Oracle Projects uses the last date of the GL period in which the expenditure item date falls.

What organization was used for calculating burden amounts?

Oracle Projects uses the Expenditure Organization for calculating burden amounts, unless organization distribution overrides exist for the organization. If you use organization distribution overrides, then the override to organization is used in place of the expenditure organization.

Where can I view burdened cost distribution lines?

You can use the Expenditure Inquiry window to review burdened cost distribution lines.

Why was a particular expenditure item not burdened?

If Oracle Projects does not properly distribute cost or generate revenue for an expenditure item, you can view revenue rejection reasons from the Expenditure Items window. Use the Folder option Show Field to display either Cost Distr. Rejection or Revenue Distr. Rejection.

To be burdened, an expenditure item must meet the following conditions:

What do I need to do if I add a new organization?

See: If You Add a New Organization to the Project Burdening Hierarchy Version.

What do I need to do if I add a new expenditure type?

If you want to burden transactions using a new expenditure type, you must add the expenditure type to the appropriate burden structures. You should do this before you enter transactions using this expenditure type. This will ensure that all transactions using this expenditure type are burdened. If you have charged transactions using this expenditure type before you added the expenditure type to the appropriate burden structures, you must mark these transactions to be reprocessed to burden the costs.

If you do not want to burden transactions using this expenditure type, there are no special steps that you must perform.

What happens when I compile multipliers?

When you compile a burden schedule version, Oracle Projects calculates and stores the multipliers for each organization and burden cost code in a schedule version. Additional information stored includes compiled multipliers, which allow Oracle Projects to quickly determine burden cost amounts based on the burden multipliers used for a particular organization as of a particular date.

Instead of performing a buildup of costs each time you calculate burden amounts, Oracle Projects uses the compiled multipliers to multiply the compiled multiplier by the raw cost to determine each burden cost component.

Notice in the following examples that the cost amount is the same for burden costs, regardless of the method used.

Example of cost calculation using compiled multipliers
Cost Base Burden Cost Code Compiled Multiplier Raw Cost Burden Cost
Labor Fringe 0.4 800 320.00
  Overhead 1.4 800 1,120.00
  G&A 0.42 800 336.00
Total       1,893.00

Example of cost calculation using cost buildup
Direct Labor A = 800.00  
Fringe@40% B = A X 0.40 320.00
Overhead@100% C = (A + B) X 1.0 1120.00
G&A@15% F = (A + B + C) XX0.15 336.00
Total   1,893.00

What do I do if I encounter the rejection error "Cannot find compiled multiplier"?

You may find transactions with this rejection error in the output reports of the Distribute Costs programs, the Interface Supplier Invoices from Payables program, and the Generate Draft Revenue program. These programs use compiled multipliers for calculating burden costs.

Oracle Projects expects to find a compiled multiplier for every organization, expenditure type, and burden schedule version combination that it uses in calculating burden costs. If it cannot find a compiled multiplier, it gives this rejection reason.

You must compile the schedule version that Oracle Projects is trying to use. You can determine the appropriate schedule version that must be compiled by entering the criteria that matches the rejected transaction in the View Burdened Costs window. This window displays the burden schedule version that should be used.

You can compile a specific schedule version in the Setup Burden Schedules window for standard burden schedules or in the Burden Schedule Overrides window, which is available from either the Projects or Tasks windows for burden schedule overrides. You can also submit the PRC: Compile All Burden Schedule Revisions process to recompile all uncompiled schedule versions which are not on hold.

You may also encounter this error if you have added a new organization after setting up your cost plus setup. You must run the PRC: Add New Organization Burden Compiled Multipliers process to create compiled multipliers for the new organization.

Can I apply actual multipliers to closed projects?

Yes, you can apply actual multipliers to transactions on closed projects. However, these transactions will not be processed because Oracle Projects does not process transactions on closed projects. Burden multipliers are applied to any transaction processed in the costing, revenue accrual, and billing programs when a project is set up to burden costs, as long as the project is not closed. However, you can process transactions for a project that is inactive due to having a completion date; you just cannot charge new transactions to projects having a date after the completion date.

Can I apply a multiplier on top of my burden cost buildup?

You can apply a labor multiplier to the burdened costs on projects and tasks for billing purposes. This multiplier is applied for labor items only, and is applied on top of the standard schedule multipliers defined for revenue and invoice purposes. You use the labor multiplier when you need to account for two-tier multiplier billing. In two-tier billing, you define negotiated multipliers to apply on top of the burdened amount calculated based on standard multipliers.

See Also

Labor Cost Multipliers

At what level does Oracle Projects hold burden cost?

Oracle Projects calculates and maintains burdened cost amounts for every expenditure item. The audit information to display the burden cost component breakdown is also recorded at the detail level.

With this detailed information, you can report and summarize the burdened amounts in any way that you need to analyze the information.

How can I burden non-labor transactions that existed before Release 10.5?

Cost Plus Processing was enhanced in Release 10.5. Prior to Release 10.5, you could burden only labor transactions with simple burden multipliers.

You can burden non-labor transactions that existed before Release 10.5 by:

Note: If you want to recalculate cost for a large number of non-labor items, we recommend that you mark the items for re-costing and process the items in manageable volumes of data to effectively and efficiently process the data.

How can I use cost plus processing for billing projects that existed before Release 10.5?

You can use the new burden functionality for revenue accrual and billing by changing the project and task definitions to use burden schedules instead of standard bill rate schedules for revenue accrual and billing.

Any existing, already processed items will not use the new schedules. Any new transactions or transactions marked for revenue and billing adjustments will use the new schedules.

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