Estimate at Completion (EAC) is the expected total cost to complete all work, calculated as the sum of the actual cost incurred to date (AC) and the estimated cost to complete the remaining work (ETC). It provides a realistic projection of the final project cost based on current performance trends.
Key Aspects of Estimate at Completion
- Forecasts Final Project Cost – Helps determine the total expected expenditure.
- Uses Actual Cost (AC) & Estimate to Complete (ETC) – Accounts for both past spending and future projections.
- Adapts to Project Performance – Adjusts as cost and schedule variances emerge.
- Supports Budget Control & Risk Management – Allows proactive financial planning.
EAC Calculation Methods
| Formula | When to Use | Calculation |
|---|---|---|
| EAC = AC + (BAC - EV) | If past performance is expected to continue. | AC = $150,000, BAC = $500,000, EV = $200,000 → EAC = $450,000 |
| EAC = BAC / CPI | If cost performance to date will continue. | BAC = $500,000, CPI = 0.9 → EAC = $555,556 |
| EAC = AC + [(BAC - EV) / (CPI × SPI)] | If both cost & schedule performance affect completion. | Adjusts for both cost & schedule efficiency. |
| EAC = AC + ETC | If past cost variances are no longer relevant. | New ETC is manually determined. |
Example Scenarios
Software Development
A mobile app project had an original budget (BAC) of $1,000,000. The team has spent $400,000 so far (AC) and completed 50% of planned work (EV = $500,000). Using EAC = BAC / CPI:
- CPI = EV / AC = 500,000 / 400,000 = 1.25
- EAC = 1,000,000 / 1.25 = $800,000
- Result: The project is performing well and will likely finish under budget.
Construction Project
A building renovation was estimated to cost $2 million (BAC).
Due to material shortages, the project is overspending, and the cost trend suggests additional expenses.
Using EAC = AC + (BAC - EV):
- AC = $1.2M, BAC = $2M, EV = $900K
- EAC = 1.2M + (2M - 900K) = 2.3M
- Result: The project will likely exceed budget by $300,000.
Marketing Campaign
A company planned a marketing campaign with a budget of $200,000 but faced unexpected advertising costs.
Using EAC = AC + ETC, a revised estimate is made based on the updated financial outlook.
Mermaid Diagram: EAC Process
graph LR; A["Project Start"] --> B["Planned Budget (BAC)"] B --> C["Work Completed (EV)"] C --> D["Actual Cost (AC)"] D --> E["Estimate to Complete (ETC)"] E --> F["Projected Final Cost (EAC)"]
Why Estimate at Completion Matters
- Improves Cost Forecasting – Provides accurate projections of total project costs.
- Identifies Budget Overruns Early – Helps detect financial risks before they escalate.
- Supports Informed Decision-Making – Enables proactive adjustments to spending.
- Enhances Stakeholder Communication – Ensures transparency in budget expectations.
See also: [[Actual Cost (AC), Budget at Completion (BAC), Earned Value (EV), Estimate to Complete (ETC), Planned Value (PV).