Cost Formulas

Question 1

Actual Cost (AC) (ACWP)

Answer 1

Represents the current amount actually spent on the project or during a particular time period

FORMULA => The addition of actual expenses to date, or during a particular time period on the project.

Question 2

Earned Value (EV) (BCWP)

Answer 2

Represents the current amount of work (product) completed during a particular time period, regardless of cost or time.

FORMULA => The percent complete of each activity multiplied by the planned value (PV) of the activity during a particular time period.

Question 3

Planned Value (PV) (BCWS)

Answer 3

Represents the current amount that should have been spent on the project during a particular time period.

FORMULA => The addition of all work that should have been completed to date or during a particular time period on the project.

Question 4

Budget at Completion (BAC)

Answer 4

Represents the total budget projected for the project. Also is the sum of all planned value (PV).

FORMULA => The total amount originally (or approved revision) expected to be spent on the project.

Question 5

Cost Performance Index (CPI)

Answer 5

Represents the current efficiency of spending on the project. Less than 1.0 is bad, greater than 1.0 is good, and 1.0 is on track.

FORMULA => CPI = EV /AC

Question 6

Cost Variance (CV)

Answer 6

Represents the difference between what you have accomplished and what you have spent.

FORMULA => CV = EV- AC

Question 7

Schedule Performance Index (SPI)

Answer 7

Represents the current efficiency of progress on the project. Less than 1.0 is bad; greater than 1.0 is good; 1.0 is on track.

FORMULA => SPI = EV/PV

Question 8

Schedule Variance (SV)

Answer 8

Represents the difference between what you have accomplished and what it should have taken to do it.

FORMULA => SV = EV- PV

Question 9

To Complete Performance Index (TCPI)

Answer 9

Represents the efficiency needed from the remaining resources to meet the cost goals of the project.

FORMULA => TCPI = (BAC-EV)/(BAC-AC) or (BAC-EV)/(EAC-AC)

Question 10

Estimate at Completion (EAC)

Answer 10

Represents the current total project cost based on the current efficiency (CPI) of project spending.

FORMULAS => EAC=BAC/CPI
or EAC=BAC/Cumulative CPI

Question 11

Estimate at Completion (EAC) using a new estimate

Answer 11

Represents the actual cost (AC) to date plus a new ETC.

FORMULA => EAC = AC +ETC

Question 12

Estimate at Completion (EAC) using the remaining budget

Answer 12

Represents the budget needed to complete the remaining work plus the actual cost (AC). The budget needed to complete the remaining work is the budget at completion (BAC) minus the earned value (EV).

FORMULA => EAC = AC + BAC-EV

Question 13

Estimate at Completion (EAC) using CPI

Answer 13

also EAC = AC + BAC - EV EAC = EAC = $43,477 = $7,000 +
Represents the budget needed to complete the remaining work plus the actual cost (AC). However, the budget required to complete the remaining work is adjusted by a performance factor, very often CPl.

FORMULA => EAC=AC+(BAC-EV)/(CPIxSPI)

Question 14

Estimate to Complete (ETC)

Answer 14

Represents the current total project cost REMAINING to be spent, based on the current efficiency (CPI) of project spending.

FORMULA => ETC= EAC- AC

Question 15

Variance at Completion (VAC)

Answer 15

Represents the difference between the BAC completion and EAC.

FORMULA => VAC = BAC- EAC

Question 16

Present Value (PV)

Answer 16

Shows the amount of money needed now at the interest rate (r) for a desired future outcome (FV) over a number of periods (n).

FORMULA => PV=FV/(1+r)^n

Question 17

Future Value (FV)

Answer 17

Shows the amount of money in the future at the set interest rate (r) for an amount of money (PV) now over a number of periods (n).

FORMULA => FV=PV x (1+r)^n

Question 18

PERT (could be considered a three-point estimate)

Answer 18

Ce = (Co + 4Cm + Cp)/6