NOTE: Do this work on an MS Excel Spreadsheet - Include the
Questions. 1 (p. 466): Find the schedule and cost variances for a project that has an actual cost as month 22 of $540,000, a scheduled cost of $523,000, and an earned value of $535,000. Show work and Answers on an Excel spreadsheet: Please find the detailed answer as follows: BCWP = Budgeted cost of work performed = (Earned Value) ACWP = actual cost of work performed BCWS = budgeted cost of work scheduled Schedule Variance = BCWP - BCWS CV = BCWP - ACWP BCWP = $535,000 ACWP = $540,000 BCWS = $523,000 Schedule variance: 535,000 - 523,000 = $12,000 Cost variance: 535,000 - 540,000 = -$5,000 2 (p. 466): A sales project at mon5 had an actual cost of $34,000, a planned cost of $42,000, and a value completed of $39,000. Find the cost and schedule variances and the CPI and SPI. Show work and Answers on an Excel spreadsheet: Given actual cost or AC = 34,000, planned cost or PV = 42,000, and value completed or earned value (EV) = 39,000 Cost Variance (CV) CV = EV AC CV = 39,000 34,000 = 5,000 Schedule Variance (SV) SV = EV PV SV = 39,000 42,000 = 3,000 Cost Performance Index (CPI) The cost efficiency ratio of earned value to actual costs (CPI = EV/AC) In PMPlan, the CPI is used to calculate Estimate at Completion (EAC) (EAC = BAC/CPI) CPI = EV/AC CPI = 39,000/34,000 = 1.15 Schedule Performance Index (SPI) The schedule efficiency ratio of earned value accomplished against planned value (SPI = EV/PV). The SPI describes what portion of the planned schedule was actually accomplished. SPI = EV/PV
SPI = 39,000/42,000 = 0.93
7 (p. 466): Given an activity in an advertising project whose planned cost was $12,000 but actual cost to date is $10,000 so far and the value completed is only 70 percent, calculate the cost and schedule variances. Will the client be pleased or angry? Explain. Schedule Variance = Earned Value - Planned Value = 12000*70% 12000 = -$3600 Cost Variance = Earned Value - Actual Cost = 12000*70% - 10000 = $1600 No, the client will not be please as the variances indicate "Overbudget" for the client. At the same time, the actual value derived is less than the valued planned,