The VAC is a forecast of what the variance, specifically the Cost Variance (CV), will be upon the completion of the project. It is the size of the expected cost overrun or underrun. In many situations the project manager must request additional funding as early as possible, or at least report the potential for an overrun. The VAC represents the size of this request.
The formula is:
This one is relatively simple. If you’ve calculated the EAC you’ve done the big math already and the ‘new budget’ can simply be subtracted from the ‘old budget’ to determine the cost overrun or underrun.
The Variance at Completion is simply a future projected Cost Variance (CV). It has the same units as CV. It is the same type of element.
We will once again add another column to the table:
|100||Set up Database||Mar. 1||Mar. 10||$10,000||$3,000||$2,000||$4,500||-$1,000||0.67||-$2,500||0.44||$18,182||$12,500||-$2,500|
For a full tutorial on the earned value management system, visit our Earned Value Tutorial.