EAC Calculator
Use this calculator to estimate the total cost at project completion (EAC) based on your current project performance, using key Earned Value Management (EVM) metrics. This calculation assumes that the current Cost Performance Index (CPI) will continue for the remainder of the project.
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Understanding EAC & The Formula
What is Estimate At Completion (EAC)?
EAC is a forecast of the total cost of a project at its completion. It's a critical metric in Earned Value Management (EVM) used to predict project cost outcomes based on current performance.
EAC Formula (Common Method)
One of the most common formulas for EAC, particularly when assuming current cost performance is typical and expected to continue, is:
EAC = BAC / CPI
Where:
- BAC = Budget At Completion (Total planned project budget)
- CPI = Cost Performance Index
The Cost Performance Index (CPI) is calculated as: CPI = EV / AC
Substituting CPI into the EAC formula gives:
EAC = BAC / (EV / AC)
Which simplifies to:
EAC = (BAC * AC) / EV
This calculator uses the EAC = (BAC * AC) / EV formula.
Alternative EAC Formula
Another common EAC formula is used when the *variance* to date is *not* expected to continue, and future work is expected to be performed at the original budget rate (BAC - EV is the remaining work budget). It is calculated as:
EAC = AC + (BAC - EV)
This calculator focuses on the CPI-based formula, which is often considered the default unless otherwise specified.
EAC Calculation Examples
Here are 10 examples demonstrating how EAC is calculated using the EAC = (BAC * AC) / EV formula:
Example 1: Project On Track (Ideally)
Scenario: A project is perfectly on schedule and on budget.
Known Values: BAC = $10,000, EV = $5,000 (50% of work done), AC = $5,000.
Calculation:
CPI = EV / AC = $5,000 / $5,000 = 1.0
EAC = BAC / CPI = $10,000 / 1.0 = $10,000
Using calculator formula: EAC = (BAC * AC) / EV = ($10,000 * $5,000) / $5,000 = $10,000
Result: EAC = $10,000
Conclusion: If performance continues as is, the project is expected to finish exactly on budget.
Example 2: Project Over Budget
Scenario: A project is over budget based on work completed.
Known Values: BAC = $20,000, EV = $8,000, AC = $10,000.
Calculation:
CPI = EV / AC = $8,000 / $10,000 = 0.8
EAC = BAC / CPI = $20,000 / 0.8 = $25,000
Using calculator formula: EAC = (BAC * AC) / EV = ($20,000 * $10,000) / $8,000 = $200,000,000 / $8,000 = $25,000
Result: EAC = $25,000
Conclusion: With a CPI of 0.8, the project is estimated to finish $5,000 over budget.
Example 3: Project Under Budget
Scenario: A project is under budget based on work completed.
Known Values: BAC = $50,000, EV = $25,000, AC = $20,000.
Calculation:
CPI = EV / AC = $25,000 / $20,000 = 1.25
EAC = BAC / CPI = $50,000 / 1.25 = $40,000
Using calculator formula: EAC = (BAC * AC) / EV = ($50,000 * $20,000) / $25,000 = $1,000,000,000 / $25,000 = $40,000
Result: EAC = $40,000
Conclusion: With a CPI of 1.25, the project is estimated to finish $10,000 under budget.
Example 4: Early Stage Project (Slight Variance)
Scenario: Calculating EAC early in a project's lifecycle.
Known Values: BAC = $5,000,000, EV = $500,000, AC = $600,000.
Calculation:
CPI = EV / AC = $500,000 / $600,000 ≈ 0.8333
EAC = BAC / CPI ≈ $5,000,000 / 0.8333 ≈ $6,000,000
Using calculator formula: EAC = (BAC * AC) / EV = ($5,000,000 * $600,000) / $500,000 = $3,000,000,000,000 / $500,000 = $6,000,000
Result: EAC = $6,000,000
Conclusion: Even small variances early can predict significant deviations at completion if performance doesn't improve.
Example 5: Mid-Stage Project (Significant Variance)
Scenario: A project at the halfway point is significantly over budget.
Known Values: BAC = $100,000, EV = $50,000, AC = $75,000.
Calculation:
CPI = EV / AC = $50,000 / $75,000 ≈ 0.6667
EAC = BAC / CPI ≈ $100,000 / 0.6667 ≈ $150,000
Using calculator formula: EAC = (BAC * AC) / EV = ($100,000 * $75,000) / $50,000 = $7,500,000,000 / $50,000 = $150,000
Result: EAC = $150,000
Conclusion: If current performance continues, the project is estimated to cost 50% more than planned.
Example 6: Small Project Example
Scenario: Calculating EAC for a small, short-term project.
Known Values: BAC = $5,000, EV = $4,000, AC = $3,500.
Calculation:
CPI = EV / AC = $4,000 / $3,500 ≈ 1.1429
EAC = BAC / CPI ≈ $5,000 / 1.1429 ≈ $4,375
Using calculator formula: EAC = (BAC * AC) / EV = ($5,000 * $3,500) / $4,000 = $17,500,000 / $4,000 = $4,375
Result: EAC = $4,375
Conclusion: The project is currently performing under budget and is estimated to finish below the original budget.
Example 7: High Cost Project with Variance
Scenario: A large project with significant costs incurred and minor cost overrun to date.
Known Values: BAC = $10,000,000, EV = $7,000,000, AC = $7,500,000.
Calculation:
CPI = EV / AC = $7,000,000 / $7,500,000 ≈ 0.9333
EAC = BAC / CPI ≈ $10,000,000 / 0.9333 ≈ $10,714,286
Using calculator formula: EAC = (BAC * AC) / EV = ($10,000,000 * $7,500,000) / $7,000,000 = $75,000,000,000,000 / $7,000,000 ≈ $10,714,286
Result: EAC ≈ $10,714,286
Conclusion: A small CPI below 1.0 translates to a substantial predicted cost overrun on a large project.
Example 8: Project Under Budget But Behind Schedule (CPI > 1)
Scenario: Project is efficient in terms of cost but hasn't completed as much work as planned.
Known Values: BAC = $75,000, EV = $30,000, AC = $25,000. (Planned Value PV might be higher than EV here, but PV isn't needed for this EAC formula).
Calculation:
CPI = EV / AC = $30,000 / $25,000 = 1.2
EAC = BAC / CPI = $75,000 / 1.2 = $62,500
Using calculator formula: EAC = (BAC * AC) / EV = ($75,000 * $25,000) / $30,000 = $1,875,000,000 / $30,000 = $62,500
Result: EAC = $62,500
Conclusion: Although behind schedule, the cost efficiency suggests the project might finish under budget if this efficiency continues.
Example 9: Project Over Budget and Ahead of Schedule (CPI < 1)
Scenario: Project is performing work quickly but at a higher cost than planned.
Known Values: BAC = $200,000, EV = $150,000, AC = $170,000. (Planned Value PV might be lower than EV here).
Calculation:
CPI = EV / AC = $150,000 / $170,000 ≈ 0.8824
EAC = BAC / CPI ≈ $200,000 / 0.8824 ≈ $226,667
Using calculator formula: EAC = (BAC * AC) / EV = ($200,000 * $170,000) / $150,000 = $34,000,000,000 / $150,000 ≈ $226,667
Result: EAC ≈ $226,667
Conclusion: The project's high cost rate means it is currently estimated to finish over budget, despite potentially being ahead of schedule.
Example 10: Project Nearing Completion (Small Remaining Work)
Scenario: Project is almost finished, calculating the final EAC based on near-completion data.
Known Values: BAC = $1,000,000, EV = $950,000, AC = $970,000.
Calculation:
CPI = EV / AC = $950,000 / $970,000 ≈ 0.9794
EAC = BAC / CPI ≈ $1,000,000 / 0.9794 ≈ $1,021,053
Using calculator formula: EAC = (BAC * AC) / EV = ($1,000,000 * $970,000) / $950,000 = $970,000,000,000 / $950,000 ≈ $1,021,053
Result: EAC ≈ $1,021,053
Conclusion: Even a small CPI variance at the end of a project can result in a final EAC slightly above or below BAC.
Frequently Asked Questions about EAC
1. What does EAC stand for?
EAC stands for Estimate At Completion. It is a forecast of the total cost that will be incurred at the end of the project.
2. What is the purpose of calculating EAC?
EAC helps project managers and stakeholders predict the project's final cost based on current performance. It provides an early warning system for potential budget overruns or underruns and supports decision-making.
3. Which formula does this calculator use?
This calculator uses the formula EAC = (BAC * AC) / EV, which is derived from EAC = BAC / CPI. This formula assumes that the cost performance experienced to date (represented by CPI) will continue for the remaining work.
4. What are BAC, EV, and AC?
- BAC (Budget At Completion): The total approved budget for the project.
- EV (Earned Value): The value of the work actually performed, measured in terms of the budget planned for that work.
- AC (Actual Cost): The total cost incurred for the work performed to date.
5. What is CPI and how does it relate to EAC?
CPI stands for Cost Performance Index (CPI = EV / AC). It measures the cost efficiency of the project. A CPI > 1 indicates being under budget, CPI < 1 indicates being over budget, and CPI = 1 is on budget. The CPI-based EAC formula uses this index to project the final cost assuming the current efficiency continues.
6. What happens if EV or AC is zero?
The formula EAC = (BAC * AC) / EV involves division by EV. If EV is zero, the calculation is undefined or results in an error (often tending towards infinity if BAC and AC are positive). Similarly, if AC is zero (and EV is positive), CPI becomes infinite, leading to an EAC of zero, which is also not a meaningful projection. This calculator validates inputs to require EV and AC to be greater than zero for a valid calculation.
7. Are there other EAC formulas?
Yes, other EAC formulas exist, often based on different assumptions about future performance. A common alternative is EAC = AC + (BAC - EV), which assumes future work will be completed at the planned rate (ETC = BAC - EV) and doesn't assume the current variance will continue.
8. When should I use the CPI-based EAC formula?
The EAC = BAC / CPI formula is typically used when the current cost variance is seen as representative of future variances or when you expect the project team to continue performing at the current efficiency level for the remaining work.
9. What does an EAC greater than BAC mean?
An EAC greater than BAC indicates that the project is currently forecasted to finish over budget. The difference (EAC - BAC) is the Variance At Completion (VAC), which is the predicted final budget variance.
10. What does an EAC less than BAC mean?
An EAC less than BAC indicates that the project is currently forecasted to finish under budget. The difference (BAC - EAC) represents a positive Variance At Completion (VAC).
