Estimate at completion
Submitted by Fariba on Mon, 06/10/2013 - 01:15
A project was budgeted at $ 1,000,000. The project is meanwhile being executed, and the following current figures have been assessed:
PV. $500,000
EV. $450,000
AC. $550,000
assuming that the cost variance was caused by one time cost drivers, which are no more effective, what estimate at completion can you derive from these figures?
a) $900,000
b) $1,000,000
c). $1,100,000
d). $1,222,222
can someone please explain? Thanks.
Forums:
Smokey
Mon, 06/10/2013 - 02:06
Permalink
Ans is D EAC - Estimate
Ans is D
EAC
- Estimate At Completion = BAC / CPI
First calculate the CPI - Cost Performance Index = EV / AC
BAC=1,000,000
cnppmp
Mon, 06/10/2013 - 03:04
Permalink
C
This is the case of atypical, the one time cost variance will not affect the BAC. This means it will be estimated to complete at original BAC.
EAC=AC+(BAC-EV)
= 550000+(1000000-450000)
=550000+550000
=1100,000
Ans) C
Regards
CN Patil
Fariba
Mon, 06/10/2013 - 03:18
Permalink
Answer is C
Thanks. Can you please explain when do we use the formula EAC = AC + ETC? and how we calculate the ETC ?
cnppmp
Mon, 06/10/2013 - 04:40
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The formula EAC=AC+ETC is
The formula EAC=AC+ETC is used when the original estimate is flawed and no more consideration or it is useless to go ahead with current variance when we know we cannot meet the budgeted value, I mean BAC.
Just ry to udnertsand what is ETC first, it is Estimate to complete, and what it means is from the current day you need to calculate the cost you would be incurring into the project going forward..that's why it is called as Forecasted estimate (EAC & ETC).
Also, you know actual coat has been incurred already you cannot do anything with that..so now if you to use ETC that means you are doing new estimate.It implies original estimate do not make any sense, so project maanger should take decision to come with new estimate along with management concurrence
So, EAC=AC+ETC is sued in such instance..you need to read the question correctly and udnerstand what is being asked.
Do no just memorize the formula unless you got the conecpt correctly.
Regards
CN Patil
Fariba
Mon, 06/10/2013 - 10:51
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Thanks.
Do you have any sample question for calculating EAC when original estimate is no longer valid?
i really appreciate your help.
cnppmp
Mon, 06/10/2013 - 11:15
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http://www.scribd.com/doc/286
http://www.scribd.com/doc/28680971/101-PMP-Sample-Questions-for-the-PMP-...
Regards
CN Patil
sonalpatwa2000@...
Fri, 06/14/2013 - 08:03
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Are these question available
Are these question available for free download? for me it ask for premius access with a fee..
cnppmp
Fri, 06/14/2013 - 10:00
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it's free, you work on those
it's free, you work on those 101 questions on-line, no option to down load. If I were in your place I would first checked myself by getting into the url..
Regards
CN Patil