HKSM
Estimate at Completion (EAC)
The projected total cost to finish all project work, found by adding the actual cost incurred to date (AC) to the estimated cost needed to complete the remaining work (ETC).
Key Points
- Estimate at Completion (EAC) forecasts what the project will cost when all work is done.
- Base formula: EAC = AC + ETC, especially when a fresh, bottom-up ETC is prepared.
- Common EVM variants include: EAC = AC + (BAC - EV)/CPI, EAC = BAC/CPI, and EAC = AC + (BAC - EV)/(CPI*SPI) depending on assumptions.
- Related terms: BAC (original total budget), ETC (remaining cost), VAC = BAC - EAC (expected overrun/underrun).
Example
A project has AC = $900,000 at mid-point. The team re-estimates the remaining work (ETC) at $1,300,000. EAC = AC + ETC = $900,000 + $1,300,000 = $2,200,000. If BAC was $2,000,000, then VAC = $2,000,000 - $2,200,000 = -$200,000 (project is forecast to finish $200,000 over budget).
PMP Example Question
A project reports AC = $700k, EV = $600k, BAC = $1.2M, and CPI = 0.75. If you assume the remaining work will continue at the current cost performance, what is the Estimate at Completion?
- $1,500,000
- $1,600,000
- $1,300,000
- $500,000
Correct Answer: A — EAC (total forecast cost) using CPI-based formula
Explanation: With performance expected to continue, EAC = AC + (BAC - EV)/CPI = 700,000 + (1,200,000 - 600,000)/0.75 = 700,000 + 800,000 = 1,500,000.
