Budget and Estimate
B-1.9 Budget at Completion (BAC)
Budget at completion (BAC) is the total budget allocated to the project. It is generally plotted over time, like periods of reporting (monthly, weekly, etc). It is used to compute the estimate at completion (EAC) (see B-1.11). BAC is also used to compute the TCPI and TSPI (see Fig. 11). It is calculated as follows:
BAC= Baselined effort hours × Hourly rate
B-1.10 Estimate to Complete (ETC)
Estimate to complete (ETC) is the estimated cost required to complete the rest of the project. It is calculated and applied when the past estimating assumptions become invalid and a need for fresh estimates arises. ETC is used to compute the estimation at completion (EAC).
B-1.11 Estimate at Completion (EAC)
Estimate at completion (EAC) is the estimated cost of the project at the end of the project (see Fig. 11). There are three methods to calculate EAC, as follows:
a) Variances are typical — This method is used when the variances at the current stage are typical and are not expected to occur in the future. In this method, EAC is calculated as AC + (BAC – EV).
b) Past estimating assumptions are not valid — This method is used when the past estimating assumptions are not valid and fresh estimates are applied to the project. In this method, EAC is calculated as AC + ETC.
c) Variances will be present in the future — This method is used when the assumption is that the current variances will be continued to be present in future. In this method, EAC is calculated as AC + (BAC – EV) / CPI.
B-1.12 Variance at Completion (VAC)
Variance at completion (VAC) is the variance on the total budget at the end of the project. This is the difference between what the project was originally expected (baseline) to cost, versus what it is now expected to cost. It is calculated as follows (see Fig. 11):
VAC = BAC – EAC
B-1.13 Percent Completed Planned
The percent completed planned is the percentage of work which was planned to be completed by the
reporting date. This is calculated using the following formula:
Percent completed planned =PV / BAC
B-1.14 Percent Completed Actual
The percent completed actual is the percentage of work which was actually completed by the reporting date.
This is calculated using the following formula:
Percent completed actual = AC / EAC
