Costpoint uses this formula if you selected the Calculate Revenue on Units check box on the Manage Revenue Information screen.

If you select this check box, unit revenue is computed in addition to non-unit based revenue.

Please note that you must enter a transaction-based revenue formula for unit revenue calculations to be allowed. Both unit and non-unit based revenue is posted to the revenue account at the level of the project revenue formula. These amounts are stored in separate fields in the Project Summary table.

The program calculates unit-based revenue by using information stored on the Item Linkage subtask of the Manage CLIN Information screen. Enter pricing information on the Project Unit Pricing subtask of the Manage CLIN Information screen. This information includes price per unit information, as well as ceiling and automatic billing amounts. Unit pricing can be fixed across all units for a given project, CLIN, and item combination, or it can be incremental based on number of units, or date ranges.

Enter and post units used for the month in the screens in the Unit Usage screens. Posting from these screens updates the Units Usage History table. You must post units to this table to have them included in revenue calculations. Units used for the period being calculated are summarized by Project, CLIN, and Item. Allowable units used for all prior years are summarized to arrive at a total number of allowable units used. Allowable units used for the current year are then summarized for all periods before the period being calculated. The program adds these amounts to the current period units used to arrive at a total number of units used. It then compares this amount to the total unit ceiling set on the Item Linkage subtask of the Manage CLIN Information screen. If units are in excess of this ceiling, they are disallowed in the reverse order in which they were used. To put it another way, units are disallowed on a "last in, first out" basis. Disallowance is based on usage date. Costpoint derives an allowable number of units for the period being calculated.

The program next looks to the Project Unit Pricing subtask of the Manage CLIN Information screen for unit pricing information. The project/CLIN and item used for pricing information is the project/CLIN and item to which units used were charged.

Unit pricing can be fixed for all units, or it can be incremental. If it is incremental, you can set price increments by date or by number of units. If the unit price is fixed for all units, the program multiplies this price by the allowable units to arrive at a revenue amount.

If unit pricing is incremental, the program first looks at the date range of the price increments.

Once it finds the correct date range, it looks next to the quantity for the unit price. It multiplies the number of allowable units less than or equal to the maximum units at that price by the corresponding price to arrive at a revenue amount for that group of units. The revenue amounts are summed for the period being calculated to arrive at a total revenue amount.

If incremental pricing is used, the program performs this calculation on a period-by-period basis. For example, assume the price per unit is $100 per unit for the first 50 units. The price for all subsequent units sold is $75 per unit. The revenue calculation multiplies the first 50 units sold each period by $100. All other units are multiplied by $75.

The program compares this revenue amount to the Contract and Funded Values set on the Manage Total Ceilings screen. If a code of R displays next to the amount, this value is used as a total revenue ceiling amount. If a code of A displays next to the amount, this value is used as a total revenue and billing ceiling amount. Revenue for the fiscal year up to and including the subperiod being calculated is summarized to arrive at year-to-date revenue recognized. Prior year revenue is summarized using the revenue amounts on the Manage Prior Year Cost and Revenue screen, and then it is added to year-to-date revenue to arrive at contract-to-date revenue recognized.

If total revenue computed exceeds the revenue ceiling, a credit is placed in the PROJ_SUM table on the revenue account line of the owning organization at the project level at which the revenue formula is entered. Thus the amount calculated is allowable total revenue. Allowable total revenue is always stored in the revenue account at the project level at which the revenue formula is entered. Unit revenue is always posted to the owning organization.

Remember that revenue is calculated on a period-by-period basis. Allowable costs and fee incurred for a given period constitute revenue for that period. Adjustments made to prior period costs are reflected in the revenue recognized for that period. For example, assume the current period for revenue calculation is period 5. You enter adjusting timesheets into period 3 for corrections to costs incurred in period 3. Financial Statements for period 3 are final and are not rerun for this period. When revenue for period 5 is calculated, allowable costs and fee are recognized as current period revenue for period 5 along with revenue on the adjusted timesheets from period 3. In the Project Summary table, revenue for period 3 does not change. When revenue is posted, revenue is summarized in the Project Summary table for all periods of the current fiscal year up to and including the period selected. In the GL_POST_SUM table, revenue account balances are summarized for all periods of the current fiscal year up to and including the period selected. The difference is posted to the current period in GL_POST_SUM. Therefore, on a period-by-period basis, revenue amounts in GL_POST_SUM may not equal revenue per the Project Summary table. The amounts tie on a YTD basis, however.

Because the accuracy of revenue and profit information on the Project Status Report depends on the calculation of revenue, make sure that you compute revenue for all projects for which you expect to print a Project Status Report. (Remember you must also update the PSR table before you run Project Status Reports.)