Essential Mathematical Formulas for PMP Certification Test
A = B + C
Example
Assume you’re planning a community gathering. You had budgeted $5,000 for the event, but as you get closer, you notice there have been some unforeseen costs. You’ve spent $3,000 by the midway point of event planning.
So, if your entire budget is $5,000 and you’ve already spent $3,000:
– Budgeted Cost= $5,000 – Actual Cost = $3,000
The Variance at Completion (VAC) formula is now as follows: [VAC = BAC – AC ]
Where: – VAC = Variance at Completion – BAC = Budgeted Cost at Completion
– AC= Actual Cost (total cost incurred)
As a result, in this case: VAC = $5,000 – $3,000 = $2,000
The Variance at Completion is $2,000, suggesting that if the project is completed at the present pace of expenditure, the total cost may be $2,000 less than the initial anticipated cost of $5,000. If the VAC is negative, the project is likely to exceed its budget by that amount upon completion.
