PM formulas

Formulas for the Exam

  • The following formulas are essential for the PMP certification exam:

Terminology and Formulas

  • Budget at Completion (BAC)

    • Description: The original total approved budget for the project.

    • Formula: None; it's the initial budget.

  • Planned Value (PV)

    • Description: The authorized budget planned for the work scheduled to be completed by a specific point in time.

    • Formula: PV=Planned%Complete×BACPV = Planned \% Complete \times BAC

  • Earned Value (EV)

    • Description: The measure of the work actually completed expressed in terms of the authorized budget for that work.

    • Formula: EV=Actual%Complete×BACEV = Actual \% Complete \times BAC

  • Actual Cost (AC)

    • Description: The total costs actually incurred (direct and indirect) in accomplishing the work up to a given point in time.

    • Formula: None; it's the actual amount spent.

  • Cost Variance (CV)

    • Description: The difference between the earned value and the actual costs. A positive value is favorable (under budget).

    • Formula: CV=EV−ACCV = EV - AC

  • Cost Performance Index (CPI)

    • Description: A measure of the cost efficiency of budgeted resources. A value greater than 1 is favorable (under budget).

    • Formula: CPI=EVACCPI = \frac{EV}{AC}

  • Schedule Variance (SV)

    • Description: The difference between the earned value and the planned value. A positive value is favorable (ahead of schedule).

    • Formula: SV=EV−PVSV = EV - PV

  • Schedule Performance Index (SPI)

    • Description: A measure of schedule efficiency. A value greater than 1 is favorable (ahead of schedule).

    • Formula: SPI=EVPVSPI = \frac{EV}{PV}

  • Estimate at Completion (EAC)

    • Description: A forecast of the total cost of the project upon completion.

    • Formula: EAC=BACCPIEAC = \frac{BAC}{CPI}

  • Estimate to Completion (ETC)

    • Description: The expected cost needed to finish all the remaining project work.

    • Formula: ETC=EAC−ACETC = EAC - AC

  • Variance at Completion (VAC)

    • Description: A projection of the amount of budget surplus or deficit at the end of the project.

    • Formula: VAC=BAC−EACVAC = BAC - EAC

  • To-Complete Performance Index (TCPI)

    • Description: The calculated cost performance that is needed to be achieved with the remaining resources in order to meet a specified management goal.

    • Formula: TCPI=(BAC−EV)(BAC−AC)TCPI = \frac{(BAC - EV)}{(BAC - AC)}