CMA Intermediate · Operations Management and Strategic Management · Project Management, Monitoring and Control
A project has a total budget at completion (BAC) of ₹20,00,000. Earned value to date is ₹8,00,000 and actual cost is ₹10,00,000. Assuming the current cost performance continues for the remaining work, what is the estimate at completion (EAC = BAC/CPI)?
The estimate at completion is ₹25,00,000. Cost performance index is 8,00,000/10,00,000 = 0.8, so EAC equals budget 20,00,000 divided by 0.8. This assumes the current cost efficiency persists for all remaining work.
- A₹22,00,000
- B₹25,00,000Correct
- C₹30,00,000
- D₹12,00,000
Explanation
CPI = EV/AC = 8,00,000/10,00,000 = 0.8. EAC = BAC/CPI = 20,00,000/0.8 = ₹25,00,000. Check: remaining work 12,00,000 at 0.8 efficiency costs 15,00,000; plus 10,00,000 spent gives 25,00,000. The ₹22,00,000 option adds only the overrun of 2,00,000 to BAC.
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