Oracle Projects – Part 2

What is Burdening?

You burden a type of cost with burden costs to obtain a more accurate representation of your company’s operating costs. For example, each hour of employee time costed directly to a project may be supported by burden costs for benefits and office space. A burden cost code represents the type of burden costs you want to apply to raw costs. For each burden cost code in the burden structure, you specify what cost base it is applied to, the expenditure type or types it is linked to, and the order in which it is applied to raw costs within the cost base.
You use the multiplier to derive the total amount of the burden cost. For example, you may burden the raw cost of labor using a multiplier of thirty percent to derive the fringe component, and in turn, the total burdened cost of labor is computed as follows:

Labor (raw cost) 1,000
+ Fringe @ 20% (burden cost) 200
Total Burdened Cost 1,200

On a project for which costs are burdened, you can create some transactions that are burdened and others that are not burdened. You define which projects should be burdened by setting the Burden Cost indicator for each project type in the Project Types window. When you specify that a project type is burdened, you must then specify the burden schedule to be used. The burden schedule stores the rates and indicates which transactions are burdened, based on cost bases defined in the burden structure.

(Info taken from Oracle Projects User Guide)