A project in its 26th week has an actual cost of $300,000. It was scheduled to have completed $325,000 worth of work at that point in the project. For the work performed to date, the budgeted value is $350,000. The project has a total budget of $500,000. What are the cost and schedule variances for the project? What are the SPI and CPI? Assuming that both schedule and cost variances will affect the remaining work, what is the EAC?
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Let's first determine the key project variables:
Planned Value (PV): $325,000
Actual Cost (AC): $300,000
Earned Value (EV): $350,000
Total Budget (BAC): $500,000
a. CV = EV – AC = $350000 - $300000 = $50,000
b. SV = EV – PV = $350000 - $325,000 = $25,000
c. SPI = EV/PV = $350000 ÷$325,000 = 1.077
d. CPI = EV/AC = $350000 ÷$300000 = 1.167
e. EAC = ?
Assuming that both SV and CV will affect the remaining work, we use the hybrid formula: EAC = AC + [(BAC-EV) / (SPI CPI)]
= $300000 + [($500000 - $350000) / (1.077 × 1.167)
= $300000 + ($150000/1.26)
=$300000 + 119,047.62
= Approximately $419, 047.62
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