The method you use to scale text and dimensions depends on whether you create text and dimensions in floating model space or in paper space. The combination of creating text in paper space and dimensions in floating model space is a common practice. However, objects created in paper space are never visible when a drawing is referenced externally as an xref.
If you create text or dimensions in model space but plan to display and print them using the paper space layout feature, use the following method.
To scale the text in notes and labels, multiply the desired height of the text by the inverse of the scale of the viewport. For example, if the plotted text height is to be 0.25 inches and the scale of the viewport is 1/48, multiply 0.25 inches by 48 to get 12 inches for the height of the text. To set the scale of the viewport, enter Zoom 1/48xp in model space, and then create the text with a height of 12 inches.
To scale dimensions, set Scale to Paper Space in the Dimension Styles dialog box. This sets the DIMSCALE system variable to 0 and AutoCAD LT automatically sets the size of new dimensions you create in the current viewport to the correct size for paper space.
When annotating in model space, you usually create a layer dedicated to text and dimensions for each viewport. This annotation layer is frozen in all other viewports.
If you create text or dimensions in paper space, create the text and dimensions at full size. For example, if the plotted text height is to be ¼ inch, create the text with a height of ¼ inch.
When working in paper space, you can use object snaps with model space geometry to create dimensions in paper space. These paper space dimensions are not associative, however. If the model space geometry is modified or the floating viewport is moved, the paper space dimensions are not automatically updated.
Objects in paper space are not displayed in externally referenced drawings. Also, extracting model space coordinates is not supported for ordinate dimensioning. Instead, create ordinate dimensions in model space.
Note: To extract true model space distances for the dimension text, you must set the DIMLFAC system variable from the Dim prompt before dimensioning. Use the Viewport option to select the floating viewport, and then create the dimensions using dimension commands and object snaps. Repeat the process for each viewport.