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  • Project management header
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    Control – part 7 - Cost - Common terms



    Common terms

    Software is capable of providing a lot of financial data in support of the project.
    Three key pieces of data are shown below.
    Remember that the presentation of too much data can be detrimental to the project.
    Be selective.

    BAC:

    Budgeted at Completion:

    This is the cost that the original baseline plan forecasts for completion of the project.

    ACWP:

    Actual Cost of Work Performed:

    Money actually spent to date.

    EAC:

    Estimated at Completion:

    Equals current costs to date plus future costs according to the outstanding schedule.

    These are very useful in spotting and investigating variances.

    In addition other measures could be:

    BCWS:

    Budgeted Cost of Work Scheduled:
    This is the original cost of a package of work or task.
    For example, task ‘A’ should cost £5000.

    BCWP:

    Budgeted Cost of Work Performed:

    This is the proportional budgeted cost of the work or task completed so far.
    For example, if task ‘A’ is only 60% completed then the budgeted cost would be £3000.

    ACWP:

    This is the actual spend on the task to date, as referred to above e.g. £2000.

    For a given task two variances can be obtained:

    The schedule variance:

    This will be:

    BCWP - BCWS = £3000 - £5000 = -£2000
    That is, this is not actual expenditure but shows that the work progression is £2000 less than budgeted for.

    The budget variance:

    This will be:

    BCWSACWP = £5000 - £2000 = £3000
    That is, this means that £2000 has been spent and there is a possibility of spending a further £3000 as the budget for the task is £5000.

    Non - PRINCE2 information

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