Estimate at Completion (EAC)

Calculating the projected total cost of a project at completion based on current performance.

Project Cost ControlForecasting EAC/ETCFree preview
⏱️ About 16 min
Estimate at Completion (EAC) — illustration

If current cost trends continue, what will this project actually cost when it finishes?

💡
The big idea: EAC projects the final total cost by blending what we have spent so far with our expected performance on the remaining work.
🎯 By the end, you'll be able to
  • Compute EAC using the typical CPI-based formula.
  • Compute EAC assuming variances are atypical (one-off).
  • Compute EAC factoring both CPI and SPI for systemic trends.
📎 Helpful to know first

Completion of Module 3: Earned Value Math.

What is Estimate at Completion?

Estimate at Completion (EAC) forecasts the total project cost at completion. As a project progresses, actual costs rarely match the planned budget exactly. EAC updates the baseline Budget at Completion (BAC) to reflect reality.

\[ EAC = BAC / CPI \]

The Typical Formula

The most common EAC formula assumes that the current Cost Performance Index (CPI) will remain constant for the rest of the project. If you are over budget today, you will continue to be over budget at the same rate.

⚠️ When to use which formula?

If a variance was a one-time event (e.g., a one-off software license), use the atypical formula. If cost overruns are systemic (e.g., chronic labor inefficiency), use the CPI-based or CPI x SPI formulas.

🎮 EAC Forecaster LIVE
Predict first: Predict first: If CPI is 0.923, will EAC be higher or lower than BAC?
Adjust BAC, EV, AC, and SPI to see how different EAC formulas respond.
📝 Worked example: Given BAC = $1,000,000, EV = $480,000, AC = $520,000, CPI = 0.923, SPI = 0.96. Calculate EAC assuming the current cost variance is typical.
  1. 1. Identify formula: EAC = BAC / CPI
  2. 2. Substitute values: EAC = 1,000,000 / 0.923
  3. 3. Calculate: EAC = $1,083,333
✓ EAC = $1,083,333
✏️ Practice: Using the same baseline (BAC = $1,000,000, EV = $480,000, AC = $520,000), calculate EAC assuming the variance is atypical (a one-off event).
💡 Hint
Use EAC = AC + (BAC - EV).
Answer
EAC = $1,040,000

Check your understanding

1. If a project has BAC=$1M, AC=$520k, EV=$480k, CPI=0.923, what is the EAC assuming the current CPI remains typical?
EAC = BAC / CPI = 1,000,000 / 0.923 = $1,083,333.
2. What does the atypical EAC formula (EAC = AC + (BAC - EV)) assume about future work?
The atypical formula assumes the remaining work (BAC - EV) will be completed at the originally planned budget rate, ignoring current CPI.
🔎 Related lessons
Next: Estimate to Complete (ETC) · soon
✅ Key takeaways
  • EAC forecasts the total project cost at completion.
  • EAC = BAC / CPI assumes current cost efficiency continues.
  • EAC = AC + (BAC - EV) assumes variances are one-off events.
➡️ Now that we have forecasted the total cost (EAC), how much money do we specifically need to finish the job from today?
Ready for the next step? Back to the course outline →