Cost Formulas and Variables

Description Formula Variable Example

(Component
)
Actual Costs (AC) The addition of AC (ACWP) AC = $5000
represents the current actual expenses
amount actually spent to date, or during
on the project or during a particular time
a particular time period. period on the
project
Earned Value (EV) The percent EV (BCWP) EV = $4500 or
represents the current complete of each EV = $4500 = $9000 x
amount of work activity multiplied 50% Complete
(product) completed by the Planned
during a particular time Value (PV) of
period, regardless of activity during a
Cost or Time. particular t time
period.
Planned Value (PV) The addition of all PV (BCWS) PV = $5500
represents the current work that should
amount that should have been
have been spent on the completed to date
project during a or during a
particular time period. particular time
period on the
project.
Budget at Completion The total amount BAC BAC = $ 10,000
(BAC) represents the originally (or
total budget projected approved
for the project. Also is revision)
the sum of all planned expected to be
value (PV). spent on the
project
Cumulative Actual Total Actual ACc ACc = $ 5000
Cost (ACc) represents Project Costs to
the current amount Date
actually spent on the
project.

Cumulative Earned Total Earned Value EVc EVc = $ 4500

Value (EVc). Costs to Date

Cost Performance CPI=EV/AC CPI=Cost CPI = 1.0 (On Track 1

Index (CPI) represents Performance dollar spent, one dollar
the current efficiency of Index value)
spending on the project. CPI = 0.8 (Over Budget 1
Less than 1.0 is bad, dollar spent, 0.80 cents
greater than 1.0 is good, value)
1.0 is on track. CPI = 1.2 (Under Budget
1 dollar spent, 1.2 dollars
value)

Cumulative Cost CPIc=EVc/ACc CPIc = CPIc = 1.0 (On Track 1

Performance Index Cumulative dollar spent, one dollar
(CPIc) represents a CPI value)
potentially more CPIc = 0.8 (Over Budget 1
accurate CPI (as dollar spent 0.80 cents
described above) value)
because it focuses on CPIc = 1.2 (Under Budget
multiple reporting 1 dollar spent, 1.2 dollars
periods instead of just value)
the more recent period.

Cost Variance (CV) CV=EV-AC CV = Cost CV = -$500 (spent more

represents the Variance than allocated)
difference between what CV = 0 (spent as
you have accomplished planned)
and what you have CV = $500 (spent less
spent. than allocated)

Schedule SPI=EV/PV SPI=Schedul SPI = 1.0 (On Track and

Performance Index e progressing as it should)
(SPI) represents the Performance SPI = 0.8 (Behind
current efficiency of Index schedule, only
progress on the project. progressing at 80% of
Less than 1.0 is bad; planned)
greater than 1.0 is good; SPI = 1.2 (Ahead of
1.0 is on tract. schedule, progressing at
120% of planned)
Schedule Variance SV=EV-PV SV=Schedul SV = -$500 (took more
(SV) e Variance time than allocated)
represents the SV = 0 (time as planned)
difference between what SV = $500 (took less
you have accomplished time than allocated)
and what it should have
taken to do it.

To complete TCPI=(BAC-EV)/ TCPI=To TCPI = 1.25 = ($1000-

Performance Index (BAC-AC) Complete $500)/($1000-$600)
(TCPI) represents the Performance BAC = $1000
efficiency needed from Index EV = $500
the remaining resources AC = $600
to meet the cost goals of
the project.

Estimate at EAC=BAC/CPI EAC=Estima EAC = $50,000

Completion (EAC) te at EAC greater than BAC
represents the current completion (Over Budget)
total project cost based EAC less than BAC
on the current efficiency (Under Budget)
(CPI) of project
spending.

Estimate to Complete ETC=EAC-AC ETC=Estima ETC = $40,000

(ETC) represents the te to
current total project completion
costs REMAINING to be
spent, based on the
current efficiency (CPI)
of project Spending.

Variance at VAC=BAC-EAC VAC=Varian VAC = $32,500

Completion (VAC) ce at
represents the completion
difference between the
BAC and EAC.

Present Value shows (PV) Present PV = $207.81 if

the amount of money Value FV = $1000, r = 8%, n =
needed now at the set PV = FV 10
interest rate (r) for a
(1+r)n
desired future outcome
(FV) over a number of
periods (n).

Future Value shows (FV) Future FV = $1448.66 if

the amount of money in Value PV = $0 + $100, r = 8%,
the future at the set FV = PV* n = 10
interest rate (r) for an
(1+r)n
amount of money (PV)
now over a number of
periods (n).
The interest rate of an Provided on the r (interest r = 8% - 0.08
investment in a project. exam rate)

The number of Provided on the n (number n = 5 years

periods of time exam of periods)
(months, years, etc.) of
investment in a project.

Source: Crosswind Project Management, 2006, p. 292-294