Project Execution and Costing
What the domain tests
Project Execution and Costing tests the flow of actual costs from time, expenses, procurement, and supplier invoices into project expenditure items, then through adjustments, allocations, capitalization, and performance reporting.
Core rules
- Expenditure types classify costs and determine whether an item is burdened, billable, capitalized, or eligible for allocation.
- Cost collection imports transactions from subledgers and creates expenditure items. The expenditure item date drives period and accounting, not merely the transaction date.
- Cost adjustments change expenditure items; budget adjustments change budgets. They use different approval and accounting paths.
- Allocations distribute indirect costs across projects or tasks using defined bases.
- Capitalization rules identify costs to capitalize; commitment accounting tracks purchase orders before invoice.
Worked example
An employee records 8 hours at $50 on a time card coded to Task A. Cost collection creates an expenditure item of $400 for Regular Labor. The burden schedule adds 20% fringe, so burdened cost is $480. A cost adjustment later reclassifies $200 of direct labor from Task A to Task B. The adjustment changes task-level cost but does not change the original time card. Reporting must show both the original and adjusted cost.
Traps
Do not treat a cost adjustment as a budget transfer. Do not assume every expenditure item is billable; the expenditure type and contract terms control billability. Watch the difference between expenditure item date and accounting date when costs cross periods. Commitments are not actuals until invoices or receipts are processed.