Actual cost and effort calculation for a demand and demand task

  • Release version: Australia
  • Updated March 12, 2026
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    Summary of Actual Cost and Effort Calculation for a Demand and Demand Task

    Actual cost and effort are critical metrics for demand managers, representing the total realized cost and time spent on demands and their associated tasks during a specific period. These values are derived from approved time cards and the hourly rates of resources involved in the tasks.

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    Key Features

    • Cost Calculation: Actual cost is calculated by multiplying the hours reported in the time card by the resource's hourly rate. The total cost for a demand includes the costs from all associated tasks and any extra activities.
    • Effort Calculation: Actual effort for a demand task is determined by the total hours reported in the time card. This effort rolls up to the overall demand effort.
    • Hourly Rate Derivation: The hourly rate used for calculations is determined in a specific order: from a rate model (if available), then from a default labor rate, and finally from a system property if the previous two are not applicable.
    • Time Card Submissions: Resources must submit time cards for both demand tasks and any additional hours worked to accurately capture all incurred costs and efforts.

    Key Outcomes

    By effectively tracking actual costs and efforts associated with demands, organizations can better manage budgets and resources. If a demand has no tasks or assigned resources, time cards can still be submitted directly against the demand to capture costs. The calculations provide a clear view of total expenses and efforts, aiding in efficient project management.

    The example scenarios illustrate how costs and efforts roll up from individual demand tasks to the overall demand, enabling demand managers to understand financial implications and resource utilization effectively.

    Actual cost and effort represent the realized cost and time spent working on demands and demand tasks during a specific time period. These values are calculated based on approved time cards and hourly rates for resources.

    Overview of calculation

    Working on demands and demand tasks involves cost and time that add to the overall expenditure of converting a demand to a product, feature, or enhancement. Demand managers must track the actual cost and effort incurred in assessment and planning activities.
    • The actual cost is calculated by multiplying the hours reported in the time card by the hourly rate of the resource.
    • The actual effort for a demand task is calculated based on the hours reported in the time card.
    • The actual effort and cost for demand tasks roll up to calculate the actual effort and cost for the demand.

    Hourly rate calculation

    The hourly rate for calculating actual cost is derived in the following order:
    1. If a rate model is associated with the demand, the actual cost is calculated based on the hourly rate defined in the rate model.
    2. If a rate model is absent or if an hourly rate isn’t found in the rate model, the hourly rate is derived from the default labor rate.
    3. If an hourly rate isn’t found in the default labor rate, the hourly rate is derived from the default system property.

    Resource assignments and Time cards

    Don’t create resource assignments for allocating resources or groups to a demand task. Resource assignments created in the demand are used for resource estimation of the work entity created from the demand. These resource assignments automatically move to the resulting work entity when a demand is qualified and converted.

    When you submit a time card for a demand, the actual effort and cost aren’t reflected in the resource assignment. Resource assignments aren't associated with the demand by default. The actual cost and actual effort remain with the demand and aren't transferred to the created projects, even if you manually associate a resource assignment.

    If a resource spends extra hours working on a demand that aren’t associated with demand tasks, this time must also be recorded. The resource submits the time card for recording extra hours using the Time Sheet Portal. This extra cost and effort is added to the demand but isn’t reflected in the actual cost and effort for the demand tasks.

    Demand-level calculations

    The actual cost and actual effort for the demand are calculated as follows:
    • Demand Actual Cost = actual cost of all demand tasks + actual cost of extra activities
    • Demand Actual Effort = actual effort of all demand tasks + actual effort of extra activities

    If a demand has no task or assigned resource, you can capture the actual cost by submitting a time card against the demand. Once the time card is approved, an expense line is created on the demand. The expense line is processed and the actual cost of work for that time card rolls up to the demand in the Demand Actual Cost column.

    This example demonstrates actual cost and effort calculation for demand tasks and rollup to the demand.

    Scenario setup - For demand D1, the demand manager creates three demand tasks (DT1, DT2, and DT3) and assigns resources R1, R2, and R3 to each task respectively.

    Table 1. Hourly resource rates
    Resource Hourly rate in the rate model Hourly rate in the default labor rate Hourly rate in the system property
    R1 $200 $150 $50
    R2 $250 $200 $50
    R3 $150 $100 $50

    Each resource spends eight hours on the assigned demand task and submits a time card.

    Table 2. Scenario 1: Rate derived from the rate model
    Actuals Demand task DT1 Demand task DT2 Demand task DT3
    Actual effort 8 hours 8 hours 8 hours
    Actual cost 200 * 8 = $1600 250 * 8 = $2000 150 * 8 = $1200
    Demand rollup:
    • Demand Actual Cost = $4,800
    • Demand Actual Effort = 24 hours
    Table 3. Rate derived from default labor rate(Rate model not associated with demand.)
    Actuals Demand task DT1 Demand task DT2 Demand task DT3
    Actual effort 8 hours 8 hours 8 hours
    Actual cost 150 * 8 = $1200 200 * 8 = $1600 100 * 8 = $800
    Demand rollup:
    • Demand Actual Cost = $3,600
    • Demand Actual Effort = 24 hours
    Table 4. Rate derived from default system property(Rate model not associated with demand and hourly rate not found in default labor rate.)
    Actuals Demand task DT1 Demand task DT2 Demand task DT3
    Actual effort 8 hours 8 hours 8 hours
    Actual cost 50 * 8 = $400 50 * 8 = $400 50 * 8 = $400
    Demand rollup:
    • Demand Actual Cost = $1,200
    • Demand Actual Effort = 24 hours