Cost Data

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Cost Data
2
Cost Data Overview

• Factors
• Earned Value
• 50/50 Rule
• Examples

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Factors

• BCWS - Budgeted Cost Work Scheduled - Budget
  entry numbers
• ACWP - Actual Cost Work Performed - Actuals, what
  you spent
• BCWP - Budgeted Cost Work Performed - Earned
  Value, what you have accomplished

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Factors

• BAC - Budget at Completion - the total of all the
  budget numbers, the bottom line
• EAC - Estimate at Completion - based on your rate
  of expenditures, what you probably will spend by
  the end of the project
• CV - Cost Variance, BCWP - ACWP CV
• SV - Schedule Variance, BCWP - BCWS SV

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Factors

• CPI - Cost Performance Index
• BCWP/ACWP CPI
• SPI - Schedule Performance Index
• BCWP/BCWS SPI

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BCWP - Earned Value

• Calculating Earned Value should be easy if you
  set up your budget correctly.
• Earned Value or BCWP is the value of what you
  have produced. If you have produced 500,000
  worth of the 1,000,000 project, your BCWP is
  500,000 or 50.

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BCWP - Earned Value

• Lets use a wall as an example
• There are 50 per foot in materials
• It will take 4 labor hours per foot to build at
  20/hour
• There will be 200 in other labor charges
• There is a crew of four working
• The wall is 80 feet long
• On the first and last days the crew has 8 hours
  of set up and tear down time each

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BCWP - Earned Value

• Budget
• Materials - 50 X 80 4000
• Labor for wall - 4 X 80 X 20 6400
• Labor for set up and tear down - 16 X 20 320
• Additional Labor - 200
• Total 10,920

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Budget for Wall
10
Budget for Wall
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Budget for Wall
12
Wall

• Question
• How would you do this budget different?

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Actual Construction
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Actuals For Wall

• Day 1
• Set up 6 hours
• 10 feet done
• Materials - 10 X 50 500
• Labor 18.18 (32 X 20) 668.18
• Total 1168.18
• BCWS 958.18
• ACWP 1168.18
• BCWP ?

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BCWP

• How would you allocate the budget so you could
  determine BCWP?

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BCWP

• Easiest is to take total costs and prorate over
  some easy thing to measure, like the length of
  the wall.
• 10,920/80 136.50 / foot completed

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Actuals For Wall

• Day 1
• Set up 6 hours
• 10 feet done or a value of (10 X 136.50)
  1365.00 or 1365.00/10,920 complete 12.5
  complete
• Materials - 10 X 50 500
• Labor 18.18 (32 X 20) 668.18
• Total 1168.18
• BCWS 958.18
• ACWP 1168.18
• BCWP 1365.00

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Actuals for Wall - Day 1

• BCWS 958.18
• ACWP 1168.18
• BCWP 1365.00
• CV BCWP - ACWP 1365.00 - 1168.18 196.82
  Positive so it is favorable
• SV BCWP - BCWS 1365.00 - 958.18 406.82
  Positive so it is favorable
• CPI BCWP/ACWP 1365/1168.18 1.168 or for
  every dollar that is spent, we earn 1.17 in
  value
• SPI BCWP/BCWS 1365/958.18 1.42 or we are
  doing about 40 better on schedule than
  anticipated.
• EAC BAC/CPI 10,920/1.17 9333.33

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Actuals For Wall

• Day 2
• It rained - no work performed
• Labor 18.18 (32 X 20) 668.18
• Total 668.18
• BCWS 2016.36
• ACWP 1836.36
• BCWP 1365.00

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Actuals for Wall - Day 2

• BCWS 2016.36
• ACWP 1836.36
• BCWP 1365.00
• CV BCWP - ACWP 1365.00 - 1836.36 - 471.36
  Negative so it is unfavorable
• SV BCWP - BCWS 1365.00 - 2016.36 - 651.35
  Negative so it is unfavorable
• CPI BCWP/ACWP 1365/1836.36 0.74 or for
  every dollar that is spent, we earn 0.74 in
  value
• SPI BCWP/BCWS 1365/2016.36 0.67 or we are
  doing much worse than we budgeted
• EAC BAC/CPI 10,920/0.74 14756.76

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Actuals For Wall

• Day 3
• Sunny day, crew motivated, did 14 feet today.
• Materials 14 X 50 700
• Total Done 24
• BCWP 24 X 136.50 3276.00
• Labor 18.18 (32 X 20) 668.18
• Total 1368.18
• BCWS 3074.54
• ACWP 3204.54
• BCWP 3276.00

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Actuals for Wall - Day 3

• BCWS 3074.54
• ACWP 3204.54
• BCWP 3276.00
• CV BCWP - ACWP 3276.00 - 3204.54 71.46
  Positive so it is favorable
• SV BCWP - BCWS 3276.00 - 3074.54 201.46
  Positive so it is favorable
• CPI BCWP/ACWP 3276/3204.54 1.02 or for
  every dollar that is spent, we earn 1.02 in
  value
• SPI BCWP/BCWS 3276/3074.54 1.06 or we are
  doing much worse than we budgeted
• EAC BAC/CPI 10,920/1.02 10,705.89

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S - Curves

• Ok, so now we can calculate the statistics
• Next we want to be able to graph the numbers and
  see where we are from a visual perspective.

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S Curves

• S Curves are a good way to see at a glance what
  is going on.
• The following curve shows our data on a graph.

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S Curves
BCWS
ACWP
BCWP
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S Curves
BCWS
BCWP
ACWP
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S Curves
BCWS
BCWP
ACWP
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S Curves
BCWS
ACWP
BCWP
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S Curves
BCWS
ACWP
BCWP
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S Curves
BCWS
ACWP
BCWP
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S Curves
BCWS
ACWP
BCWP
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S Curves
BCWS
ACWP
BCWP
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Wall Example Continued

• The following Excel example shows how the curves
  can be used.

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50/50 Rule

• Frame has an easier way to calculate earned
  value.
• It is called the 50/50 rule.
• With this rule, you earned 50 of the earned
  value the instant you start a task and the other
  50 when the task is complete.

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50/50 Rule
Task 1 50k
Task 2 25k
Task 3 40k
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50/50 Rule
Task 1 50k Started so, we have earned 25k
Task 2 25k
Task 3 40k
BCWP ?
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50/50 Rule
Task 1 50k Started so, we have earned 25k
Task 2 25k
Task 3 40k
BCWP 25K
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50/50 Rule
Task 1 50k Started so, we have earned 25k
Task 2 25k Started so have earned 12.5k
Task 3 40k
BCWP ?
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50/50 Rule
Task 1 50k Started so, we have earned 25k
Task 2 25k Started so have earned 12.5k
Task 3 40k
BCWP 37.5K
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50/50 Rule
Task 1 50k Finished so, we have earned 50k
Task 2 25k Started so have earned 12.5k
Task 3 40k Started so we have earned 20k
BCWP 82.5K
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Reminders

• BCWP can never exceed BCWS
• At the end of a project the schedule variance
  will always equal zero
• Cost variance can exceed BCWS