Essential Mathematical Formulas for PMP Certification Test
A = B + C
Example
Assume you’re planning a party. You first projected that the overall cost of the celebration would be $1,000. However, as you proceed, you find that things are costing you more than you anticipated. As a result, you must recalculate how much the party will truly cost after it is completed.
Let’s dissect it:
– Original Budget at Completion (BAC): $1,000
– So far, the actual cost has been $800.
– How much more money is projected to be spent on the remaining work: $500
Estimate at Completion (EAC) is frequently estimated in a variety of methods depending on project circumstances. One popular formula is:
[EAC = (BAC – EV) + Actual Cost]
Where: – **Actual Cost (AC)** = $800 – **BAC** = Budget at Completion (Initial Estimate) = $1,000 – **EV** = Earned Value (Value of work accomplished thus far) – Assume $600
\[EAC = $800 + ($1,000 – $600) = $800 + $400 = $1,200 \]
As a result, the Estimate at Completion (EAC) for the party is $1,200 based on the present work and the additional estimated cost. This revised estimate assists project managers in understanding the estimated overall cost of the party by taking into account current expenditures as well as any revisions required to complete the project.
