Project Cost Management

Tangible cost: measurable

Intangible cost: unmeasurable

Direct cost: directly involved in the project

Indirect cost: cost of shared resource

Sunk cost: spent in the past

Fixed cost:

Variable costs:

Commited cost:

 

Earned value analysis example

I am running a carpentry workshop and have recently received an order for manufacturing

100 doors for an apartment complex in 20 days for a price of $30,000. My estimated cost for

making the doors is $24,000. After 6 days my workers have completed 32 doors. I figured

that I have spent $15,040 on materials and labour.

 

Planned value (PV) = (42000/100)*30 = 12600

Earned value (EV) = (42000/100)*32 = 13440

Actual cost (AC) =15040

Schedule Variance (SV) = EV - PV = 840

Cost Variance (CV) = EV - AC = -1600

Schedule performance index (SPI) = EV/PV = 13440/12600 = 1.067

Cost performance index (CPI) = EV/AC = 13440/15040 = 0.89

Estimate to complete (ETC) = 68 * (15,040 / 32) = 31,960

Expected at completion (EAC) = AC + ETC = 47,000

Variance at completion (VAC) = BAC - EAC = 42,000 - 47,000 = -5,000

Budget at completion (BAC) = 42,000

Percentage of work completed (PC) = EV/BAC = 13440/42000 = 32%

Percentage of money spent (PS) = AC/BAC = 15040/42000 = 36%