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EAC Formulas for the PMP Exam: The 4 Cases, VAC and TCPI, Explained Simply

Estimate at completion (EAC) forecasts the total cost of the project. The exam gives you a clue in the question that tells you which EAC formula to use.

In simple words

EAC answers: if we continue like this, what will the whole project cost? The answer depends on the story. If the problem will continue, use the current efficiency (CPI). If the problem was a one-time event, the rest of the work costs what was planned. If the original estimate was wrong, estimate the rest again from the bottom up.

What the PMP exam wants

Current performance will continue (the most common): EAC = BAC ÷ CPI.

The variance was a one-time event and will not happen again: EAC = AC + (BAC − EV). The remaining work is done at the planned rate.

The original estimate is no longer valid: EAC = AC + bottom-up ETC (a new estimate for the remaining work).

Both cost and schedule problems will affect the rest (the question says so): EAC = AC + (BAC − EV) ÷ (CPI × SPI).

ETC = EAC − AC. VAC = BAC − EAC: a positive VAC means under budget at the end, negative means over budget. The rule “below 1 is bad” is for CPI and SPI, not for VAC. TCPI = (BAC − EV) ÷ (BAC − AC): above 1 means the remaining work must be done more efficiently than the work so far.

Real example

BAC = $100k, PV = $50k, EV = $40k, AC = $50k. CPI = 40 ÷ 50 = 0.8, SPI = 40 ÷ 50 = 0.8. Problem continues: EAC = 100 ÷ 0.8 = $125k (VAC = −$25k). One-time problem: EAC = 50 + 60 = $110k. Cost and schedule both: EAC = 50 + 60 ÷ 0.64 ≈ $143.8k. TCPI = 60 ÷ 50 = 1.2, so the team would need to be 20% more efficient to finish within the original budget.

The common trap

Tempting wrong answers: always using BAC ÷ CPI, or reading a negative VAC as good news. Look for the clue: “will continue”, “one-time”, “estimate was wrong”, “both cost and schedule”.

Remember: Continue → BAC÷CPI. One-time → AC+(BAC−EV). Estimate wrong → AC+new ETC. Both → AC+(BAC−EV)÷(CPI×SPI). VAC positive = good.

🗝 Words to notice in the question

“expected to continue”, “typical” → BAC÷CPI. “one-time”, “atypical”, “will not happen again” → AC+(BAC−EV). “original estimate was flawed” → bottom-up ETC. “schedule pressure also affects cost” → CPI×SPI

Try 2 practice questions

Choose an answer, or open “Show the answer.”

Question 1 BAC is $200k, EV is $80k and AC is $100k. A supplier problem caused the overrun, and it will not happen again. What is the EAC?

Show the answer

Answer: B. A one-time (atypical) variance: EAC = AC + (BAC − EV) = 100 + 120 = $220k. BAC ÷ CPI ($250k) would assume the problem continues.

Question 2 The forecast shows VAC = +$15k. What does this mean?

Show the answer

Answer: B. VAC = BAC − EAC. A positive VAC means the expected total cost is below the budget: under budget at the end.

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