Expenditure Type with Cost rate

 I've setup an expenditure type with a UOM of hours and checked rate required and input a cost rate.  The time is not going to interface from OTL, but rather from a  web adi.

1)should the expenditure type be setup with an expenditure type class of Straight time/and use labor web adi

   or miscellaneous transaction/and use nonlabor web adi  or does it matter as long as I use the correspondingly correct web adi

2)I've actually assigned both classes to the expenditure type class and tried both a preapproved batch with time card and miscellaneous transaction and when I run both PRC: Distribute Labor Costs and PRC: Distribute Usage and Miscellaneous Costs I get an error of 'Missing Cost Rate' .  The incurring by organization is on the pa_expenditures_all table, but no organization_id is on the pa_expenditure_items_all table (the org_id is there for the OU).  Any idea what setup I've missed to get the 'Missing Cost Rate'?