Question

A project has 117 activities. At the end of period 4, it has been reported that activity A is 100% completed, activity B is 100% completed, activity C is 50% completed, and activity D is 80% completed. The budgeted costs for these activities are shown in the following table. Activity А B С D Total Budgeted Cost($) 20 15 100 35 According to the project plan, the cumulative budgeted cost at the end of period 4 is $110 and the total project budgeted cost is $320. On the other hand, the cumulative actual cost at the end of period 4 is reported to $150. Assuming the rest of the project will continue at the CPI of 1, at the end of period 4. the project cost at completion is estimated to be $

Answer 1

The budgeted cost for 4 activities combined is 20+15+100+35 = $170

The cummulative actual cost at end of period 4 (AC)= $150

The cummulative budgeted cost at the end of period 4 = $110

Total project budgeted cost (BAC) = $320

CPI for rest of the project = 1

Project cost at completion (Estimate at completion, EAC) = Estimate to Complete (ETC)+ Actual Cost (AC)

EAC = ETC + AC

EAC = BAC + AC - EV

Here, Earned Value (EV) = 100% * 20 + 100% * 15 +50% * 100 + 80% * 35

EV = 20 + 15 +50 + 28 = 113

As, CPI is 1, there is no variance in project cost for the rest of period.

EAC = 320 + 150 - 113

EAC = $357

This is total project at the completion.

Also, Estimate to Complete (ETC) = EAC - AC

ETC = 357 - 150

ETC = $207

This is cost to be expensed after period 4 for project completion.

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