Crowe Cost Flashcards
Cost Management
Knowledge area with 3 processes that focus on creating the cost estimates, creating a budget, and controlling that budget.
Processes:
- Estimate Costs (Planning)
- Determine Budget (Planning)
- Control Costs (Monitoring & Controlling)
Estimate Costs
Planning process within cost management concerned with creating the activity cost estimates.
Key Inputs
• (none)
Key Tools • Analogous Estimating • Parametric Estimating • Botton-Up Estimating • Three-Point Estimates • Reserve Analysis
Key Outputs
• Activity Cost Estimates
Determine Budget
Planning process within cost management concerned with creating the cost performance baseline (also known as the budget).
Key Inputs
• (none)
Key Tools
• Cost Aggregation
• Reserve Analysis
• Funding Limit Reconciliation
Key Outputs
• Cost Performance Baseline
• Project Funding Requirements
Control Costs
Monitoring and Controlling process within cost management concerned with controlling the changes to the budget according to the cost management plan.
Key Inputs
• Project Management Plan
• Project Funding Requirements
Key Tools • Earned Value Measurement • Forecasting • TCPI • Variance Analysis
Key Outputs
• Work Performance Measurements
• Budget Forecasts
Life-cycle Costing
A way of considering cost not only based on purchase price or development cost but also factoring in anticipated operating costs. Life-cycle costing looks beyond the project itself.
Project costs that are initially higher but have a lower overall life-cycle cost should be viewed favorably.
Value Engineering
A method of improving the value of a product, service, or result by increasing the functionality or reducing the overall cost.
Value engineering seeks to optimize costs to achieve the highest possible value for the project.
BAC
Budgeted At Completion
Calculation used in earned value management representing the total budgeted cost for this project. The BAC is usually specified in the cae or question. No one formula exists to calculate the BAC.
PV
Planned Value, also known as BCWS (Budgeted Cost of Work Scheduled).
A calculation used in earned value management representing the work that should have been completed at a point in the schedule.
PV = planned % complete × BAC
EV
Earned Value, also known as BCWP (Budgeted Cost of Work Performed).
A calculation used in earned value management representing the work that actually was completed at a point in time.
EV = actual % complete × BAC
AC
Actual Cost, also known as ACWP (Actual Cost of Work Performed).
Calculation used in earned value management representing the sum of the costs for a given period of time.
AC = sum of costs for a given period of time
CV
Cost Variance
A calculation used in earned value management representing the difference between what expenditures were planned and what was actually spent.
CV = EV - AC
Schedule Variance
Schedule Variance
A calculation used in earned value management representing the difference between what as planned to be completed and the work that was actually completed for a scheduled period of time.
SV = EV - PV
CPI
Cost Performance Index
The rate at which the project’s performance is meeting cost expectations during a given period of time.
CPI = EV ÷ AC
CPIc
Cumulative CPI
The rate at which the project’s performance is meeting cost expectations from the beginning of the project to a point in time. CPIc is also used to forecast the project’s cost at completion.
CPIc = EVc ÷ ACc
SPI
Schedule Performance Index
the rate at which the project’s performance is meeting schedule expectations up to a point in time.
SPI = EV ÷ PV
EAC
Estimate At Completion
the total projected cost of the project adjusted for past performance.
EAC = BAC ÷ CPIc
ETC
Estimate To Complete
the projected amount of how much more will need to be spent to finish the project from this point forward, based on past performance.
ETC = EAC - AC
Variance At Complete
The difference between what was bufgeted and what is projected to be spent.
VAC = BAC - EAC
TCPIc
To-Complete Performance Index
Performance that must be achieved in order to meet financial or schedule goals.
TCPIc = (BAC-EV) ÷ Remaining Funds
(If the BAC is the goal, the Remaining Funds = BAC - AC)
