Be sure to show all calculations, preferably in an EXCEL file. Each problem is o

Question

Be sure to show all calculations, preferably in an EXCEL file. Each problem is of equal value. Each part of a problem is equal.

Problem 1. 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?

CV =

SV =

SPI =

CPI =

EAC =

Explanation / Answer

Actual Cost AC $ 300,000.00
Earned Value EV $ 350,000.00
Planned Value PV $ 325,000.00
Total Budget TB $ 500,000.00
Cost Variance EV-AC = $ 350,000.00 - $ 300,000.00 $   50,000.00 Cost Variance is positive, this means you are under budget
Schedule Variance EV-PV = $ 350,000.00 - $ 325,000.00 $   25,000.00 Schedule Variance is positive, this means you are ahead of schedule.
Schedule Performance Index (SPI) EV/PV = $ 350,000.00 / $ 325,000.00 1.07692 the SPI is greater than one, this means more work has been completed than the planned work. In other words, you are ahead of schedule
Cost Performance Index (CPI) EV/AC = $ 350,000.00 / $ 300,000.00 1.16667 the CPI is greater than one, you are earning more than the amount spent. In other words, you are under budget.
Estimate at Completion (EAC): refer working note - 1 = $ 419,387.76
Working Note -1
In the problem it has been sops hihlighted thet athe project would continue to follow the historic matintaisned CPI as well as SPI indices
Thus out of the 5 availabsle ways to arrive at EAC, the enclosed formula is the best approach to arrive at the EAC considering rthe above.
EAC = AC + ((BAC - EV) / (Cumulative CPI x Cumulative SPI))
Budget At Completion (BAC) =(total budget) = $ 500,000.00
EAC =$ 419,387.76

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