The cost is divided into work packages.
For every activity, it is required to define the following in order to calculate the cost:
• Execution time start and finish
• The resources to execute this activity
• The cost to execute the activity
The cost account (CA) records the expenditure of the project’s budgeted activity. Covering everyone responsible in the organization, it comprises mostly direct costs for materials and labor.
For example, the concrete supervisor will be responsible for executing the following activities: 
So, in this case, he or she will be responsible for three cost allocations with a total cost of $610,000.
Note that indirect costs, so far, have not been taken into account under this rubric. Not being costs incurred as part of fulfilling the requirements of the WBS, they are charged to the administrative management of the project or elements of project management. For example, the concrete foreman in the previous example has a salary and consumes equipment and other expenses. These expenses cannot be added or charged to the specific activities, as he will supervise the foundation, columns, the slabs, and others. Those expenses must be paid on a regular basis nevertheless during the execution of these activities.
Any other expenses of supervision must similarly be taken into account, as well as related administrative expenses such as offices for the engineers, technicians, computers, cars to transport engineers, and expenses and salaries of engineers and senior management. For example, concrete work might continue for a period of six months. Monthly indirect expenses (the concrete former’s salary and miscellaneous expenses) are $10,000. While the cost of concrete materials and manufacturing from mixing until curing it is accounted a direct cost of around $440,000 (calculated based on the quantity of concrete), the concrete former"s salary for supervising this activity is included in indirect costs and allocated over the six months allotted for this activity. Thus, the total reinforcing concrete budget comprises:
Direct costs = $440,000;
Indirect costs = $60,000;
Total costs = $500,000;