Variance at Completion (VAC)
Variance at Completion (VAC) is the projected difference between the budget at completion and the estimate at completion: VAC = BAC - EAC.
Explanation
VAC forecasts the expected budget surplus or deficit at the end of the project. A positive VAC indicates the project is projected to finish under budget, while a negative VAC indicates it will finish over budget. A VAC of zero means the project is expected to finish exactly on budget.
The formula is VAC = BAC - EAC. For example, if the BAC is $500,000 and the EAC is $550,000, then VAC = -$50,000, meaning the project is forecast to be $50,000 over budget at completion.
VAC provides a simple, quick assessment of overall project cost health. It is useful for reporting to stakeholders and for making decisions about whether corrective action is needed. VAC should be evaluated alongside CPI and other metrics for a complete picture of cost performance.
Key Points
- •Formula: VAC = BAC - EAC
- •Positive VAC = projected under budget; negative VAC = projected over budget
- •Provides a quick summary of expected cost outcome
- •Used for stakeholder reporting and corrective action decisions
Exam Tip
VAC = BAC - EAC. Positive is good (under budget at completion). This is a straightforward formula but be sure to calculate EAC correctly first.
Frequently Asked Questions
Related Topics
Estimate at Completion (EAC)
Estimate at Completion (EAC) is the expected total cost of completing all work, calculated by projecting current performance into the future.
Cost Variance (CV)
Cost Variance (CV) is an EVM metric that measures cost performance as the difference between earned value and actual cost: CV = EV - AC.
Cost Performance Index (CPI)
Cost Performance Index (CPI) is an EVM efficiency metric that measures cost performance as the ratio of earned value to actual cost: CPI = EV / AC.
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Cost Performance Index (CPI)
Cost Performance Index (CPI) is an EVM efficiency metric that measures cost performance as the ratio of earned value to actual cost: CPI = EV / AC.
Schedule Performance Index (SPI)
Schedule Performance Index (SPI) is an EVM efficiency metric that measures schedule performance as the ratio of earned value to planned value: SPI = EV / PV.
Earned Value Management (EVM)
Earned Value Management (EVM) is a methodology that integrates scope, schedule, and cost data to assess project performance and progress objectively.
Burndown Chart
A Burndown Chart is a graphical representation of work remaining versus time in a Sprint or release, showing whether the team is on track to complete the planned work.
Resource Leveling
Resource leveling is a resource optimization technique in which adjustments are made to the project schedule to keep resource usage at or below a defined limit, often resulting in a longer project duration.
Risk Register
The risk register is a project document that records the details of individual project risks, including their identification, analysis results, response plans, and current status.
Stakeholder Mapping
Stakeholder mapping is the visual representation of stakeholder relationships, influence, interest, or other attributes using grids, matrices, or diagrams to support analysis and engagement planning.
Relative Estimation
Relative Estimation is an agile technique where work items are sized in comparison to each other rather than in absolute units like hours or days, providing faster and more accurate estimates.
Power/Influence Grid
The power/influence grid is a stakeholder classification model that groups stakeholders based on their level of authority (power) and their active involvement or ability to affect the project (influence).
Part of
Cost Management
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