To calculate labor costs, you must assign a costing rule to each expenditure organization. If a costing rule has a costing method of Rates, you must also assign a cost rate schedule to each organization using the costing rule.
Use the Organization Labor Costing Rules window to:
• Assign costing rules and rate schedules, if appropriate, to operating units, parent organizations, or specific expenditure organizations. The costing rule and rate schedules assigned to an organization apply to all employees in the organization.
• Specify currency rate attributes to be used during calculation of labor costs if the currency of the cost rate schedule is different from the currency of the operating unit in which the timecard is entered.
• Define default overtime projects and tasks for organizations using the overtime calculation extension to generate overtime transactions.

When you assign a costing rule and a rate schedule to an organization, Oracle Project applies the following rules in the order presented to determine the costing rule for each transaction:
• If an assignment exists for the transaction expenditure organization, then the corresponding costing rule and rate schedule are used to calculate labor costs.
• If an assignment does not exist for the expenditure organization, Oracle Projects uses the Expenditure Organization Hierarchy and searches for an assignment for the parent organization owning the expenditure organization. If an organization has multiple parents and a rule is assigned to each, the rule assigned to the lowest level parent organization is applied.
• If an assignment does not exist for a parent organization, Oracle Projects searches for an assignment for the expenditure operating unit.

Prerequisites
❑ Define Rate Schedules
❑ Define Labor Costing Rule

To assign costing rules and rate schedules:
1. In the Organization Labor Costing Rules window, select an Operating Unit, Organization or both.
2. Select a labor costing rule. If the labor costing rule has a costing method of Rates, select the cost rate schedule that defines the hourly cost rates for employees in the selected organization.
3. Enter a default job rate schedule to be used when forecasting costs for unstaffed positions.
4. Enter the Effective Dates during which the assignment of the costing rule and rate schedule are valid for the organization.
5. If you use the overtime calculation extension, optionally enter a default project and task for system generated transactions.
6. If your cost rate schedule currency is different from your operating unit currency, enter the currency conversion attributes in the Currency Conversion Attributes region. If you do not specify currency attributes, the rate attributes defined in the Implementation Options window are applied.