Budget at Completion (BAC) & EAC Calculator
Calculate Budget at Completion
Enter the budgeted costs for different project components and the performance data to date to calculate the Budget at Completion (BAC) and other key metrics like Estimate at Completion (EAC).
CPI = EV / AC.
EAC = BAC / CPI (assuming current CPI continues).
ETC = EAC – AC.
VAC = BAC – EAC.
| Metric | Value | Unit |
|---|---|---|
| Budget Task 1 | 50000 | $ |
| Budget Task 2 | 30000 | $ |
| Budget Other Tasks | 20000 | $ |
| Actual Cost (AC) | 45000 | $ |
| Earned Value (EV) | 40000 | $ |
| Budget at Completion (BAC) | 100000 | $ |
| Cost Performance Index (CPI) | 0.89 | – |
| Estimate at Completion (EAC) | 112500 | $ |
| Estimate to Complete (ETC) | 67500 | $ |
| Variance at Completion (VAC) | -12500 | $ |
What is Budget at Completion (BAC)?
The Budget at Completion (BAC) is a key element in project management, specifically within Earned Value Management (EVM). It represents the total planned budget for the entire project or a specific work package or control account. Essentially, it’s the sum of all budgets allocated to the work to be performed to complete the project. The Budget at Completion is the baseline against which project performance, particularly cost performance, is measured.
It’s established during the project planning phase and, ideally, remains fixed unless formal change control processes approve scope changes that impact the budget. The Budget at Completion serves as the original planned cost for the project’s total scope of work.
Who Should Use Budget at Completion?
Project managers, cost controllers, program managers, and stakeholders involved in monitoring project health use the Budget at Completion extensively. It’s fundamental for:
- Setting a cost baseline.
- Measuring cost variance (the difference between planned and actual costs).
- Calculating performance indices like the Cost Performance Index (CPI).
- Forecasting the final project cost (Estimate at Completion – EAC).
Common Misconceptions About Budget at Completion
A common misconception is that the Budget at Completion changes as the project progresses and actual costs are incurred. While the forecast of the final cost (EAC) changes, the BAC itself should only change if there’s an approved change in the project scope that alters the original budget. Another is confusing BAC with the current spending or the forecasted cost. BAC is the *planned* total budget, not what has been spent or what we now think it *will* cost.
Budget at Completion (BAC) Formula and Mathematical Explanation
The Budget at Completion (BAC) is most simply the sum of all individual budget values for all work packages or activities within the project’s scope.
BAC = Sum of all budgeted costs for the project’s scope.
It’s determined during the detailed planning and budgeting phase. If you have budgeted costs for various tasks, phases, or work packages, the BAC is their sum.
Once you have BAC, and you gather performance data like Actual Cost (AC) and Earned Value (EV), you can calculate related metrics:
- Cost Performance Index (CPI) = EV / AC (Measures cost efficiency)
- Estimate at Completion (EAC) = BAC / CPI (Forecasted total cost based on current performance) or other formulas depending on assumptions.
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| BAC | Budget at Completion | Currency ($) | Positive value |
| AC | Actual Cost (of Work Performed) | Currency ($) | Positive value |
| EV | Earned Value (Budgeted Cost of Work Performed) | Currency ($) | Positive value |
| CPI | Cost Performance Index | Ratio | >0 (often around 0.5 to 1.5) |
| EAC | Estimate at Completion | Currency ($) | Positive value |
| ETC | Estimate to Complete | Currency ($) | Positive or negative |
| VAC | Variance at Completion | Currency ($) | Positive or negative |
Practical Examples (Real-World Use Cases)
Example 1: Software Development Project
A software project has a planned Budget at Completion (BAC) of $200,000, composed of $100,000 for development, $50,000 for testing, and $50,000 for deployment.
After a few months, the project has incurred an Actual Cost (AC) of $110,000, and the Earned Value (EV) of the work completed is $90,000.
- BAC = $200,000
- AC = $110,000
- EV = $90,000
- CPI = EV / AC = $90,000 / $110,000 = 0.818
- EAC = BAC / CPI = $200,000 / 0.818 = $244,499 (approx.)
The project is over budget (CPI < 1) and is now forecasted to cost around $244,499 instead of the planned $200,000 Budget at Completion, assuming the current cost performance continues.
Example 2: Construction Project
A small construction project had an initial Budget at Completion (BAC) of $500,000. Midway through, $300,000 has been spent (AC), and the value of work done (EV) is $250,000.
- BAC = $500,000
- AC = $300,000
- EV = $250,000
- CPI = $250,000 / $300,000 = 0.833
- EAC = $500,000 / 0.833 = $600,240 (approx.)
The project is significantly over budget, and the forecasted final cost (EAC) is much higher than the original Budget at Completion.
How to Use This Budget at Completion Calculator
This calculator helps you determine the Budget at Completion (BAC) by summing budgeted tasks and then uses performance data (AC and EV) to calculate related metrics like CPI and EAC.
- Enter Budget Components: Input the planned budgets for different tasks or phases of your project (e.g., Task 1, Task 2, Other Tasks). The sum will be your BAC.
- Enter Performance Data: Input the Actual Cost (AC) incurred to date and the Earned Value (EV) of the work completed.
- Calculate: Click “Calculate” (or see results update live if you entered data).
- Review Results:
- Budget at Completion (BAC): Your total planned budget.
- Cost Performance Index (CPI): Efficiency of cost utilization (CPI < 1 is over budget, CPI > 1 is under budget).
- Estimate at Completion (EAC): The forecasted total cost of the project based on current performance.
- Estimate to Complete (ETC): The estimated additional cost to finish the remaining work.
- Variance at Completion (VAC): The difference between BAC and EAC, indicating expected overrun or underrun.
- Analyze Chart and Table: The chart visually compares key values, and the table summarizes inputs and outputs.
If EAC is higher than BAC, your project is projected to exceed the original Budget at Completion. Investigate the reasons for poor CPI and take corrective actions if possible.
Key Factors That Affect Budget at Completion Results
While the initial Budget at Completion (BAC) is set during planning, its relationship with the final cost (EAC) is affected by many factors:
- Scope Creep: Uncontrolled changes or additions to the project scope after the BAC is set will invariably increase costs and likely the EAC, unless the BAC is formally re-baselined.
- Inaccurate Initial Estimates: If the initial budget components summed to create the Budget at Completion were unrealistic, the EAC will quickly diverge.
- Resource Costs: Fluctuations in labor rates, material prices, or equipment costs after setting the BAC can lead to cost overruns (poor CPI) and a higher EAC.
- Project Risks: Unforeseen risks materializing can add significant costs not originally part of the BAC, impacting EAC.
- Team Performance and Productivity: Lower-than-expected productivity can lead to more hours being spent, increasing AC relative to EV, lowering CPI, and raising EAC above the Budget at Completion.
- Inflation: For long-duration projects, inflation can erode the buying power of the original Budget at Completion if not adequately factored in.
- Project Delays: Delays often increase costs due to extended resource usage, overheads, and potential penalties, pushing EAC above BAC.
- External Factors: Economic conditions, regulatory changes, or supplier issues can impact costs beyond the project team’s direct control, affecting how EAC compares to the Budget at Completion.
Frequently Asked Questions (FAQ)
BAC is the total planned budget for the project set at the beginning. EAC is the forecasted final cost of the project based on performance to date and expectations for the future.
BAC is determined during project planning by summing the estimated costs of all individual activities or work packages within the project scope.
Yes, but only through a formal change control process if there are approved changes to the project scope that affect the budget. It shouldn’t change just because costs are higher than planned without a scope change.
A Cost Performance Index (CPI) less than 1 means the project is over budget for the work performed so far. It suggests the EAC will likely be higher than the BAC if performance doesn’t improve.
Variance at Completion (VAC) is the difference between the Budget at Completion (BAC) and the Estimate at Completion (EAC) (VAC = BAC – EAC). A negative VAC indicates a forecasted budget overrun.
This indicates a significant cost overrun is projected. You need to analyze the reasons (low CPI, scope changes, risks) and consider corrective actions or re-forecasting and communicating with stakeholders about the expected increase over the original Budget at Completion.
The most common is EAC = BAC / CPI, which assumes the current cost performance will continue. Other formulas exist, like EAC = AC + (BAC – EV), used when past performance is not typical, or EAC = AC + New ETC, when a fresh estimate for remaining work is made.
Earned Value is the budgeted cost of the work actually performed. It’s used with Actual Cost (AC) to assess performance against the plan (which is based on the components of the Budget at Completion).