Variance at Completion (VAC) is a projection of the amount of budget deficit or surplus, expressed as the difference between the budget at completion and the estimate at completion.
It indicates how much over or under budget the project is expected to be at completion based on current performance trends. A negative VAC signals a projected budget overrun, while a positive VAC indicates a likely cost saving.
Formula
Where:
- BAC = Budget at Completion
- EAC = Estimate at Completion
Example Table: VAC Calculation Over Time
| Reporting Period | BAC ($) | EAC ($) | VAC ($) | Interpretation |
|---|---|---|---|---|
| Week 1 | 100,000 | 105,000 | -5,000 | Project trending over budget |
| Week 2 | 100,000 | 102,000 | -2,000 | Improvement in cost trend |
| Week 3 | 100,000 | 100,000 | 0 | On budget |
| Week 4 | 100,000 | 98,000 | +2,000 | Project trending under budget |
Role in Forecasting and Control
- Quantifies Projected Budget Variance – Forecasts the financial outcome at completion
- Informs Corrective Action – Enables proactive cost management decisions
- Complements Other EVM Metrics – Used with CV, CPI, and TCPI for full insight
- Strengthens Financial Reporting – Offers clear communication of cost risk and opportunity
See also: Budget at Completion (BAC), Estimate at Completion (EAC), Cost Variance (CV), Variance Analysis, To-Complete Performance Index (TCPI).