Estimate at Completion (EAC)

What the EAC is

The EAC is the forward-looking heart of cost control. The estimate (Track 2) set the original budget — the budget at completion (BAC). As work proceeds and reality diverges from plan, the EAC continuously re-answers "where will we end up?" It's the number that turns measurement into foresight.

Methods for forecasting the EAC

The methods differ in how they forecast the cost still to come. The main ones, from optimistic to pessimistic:

• Remaining work goes to plan — EAC = AC + (BAC − EV). Assumes past overruns won't repeat. Optimistic — use only if the overrun was a one-off.
• Current cost performance continues — EAC = BAC ÷ CPI. Assumes the efficiency seen so far persists. The most common, evidence-based method.
• Cost & schedule both continue — EAC = AC + (BAC − EV)/(CPI × SPI). Most pessimistic — when schedule pressure is also driving cost.
• Bottom-up re-estimate — Re-estimate the remaining work in detail. The most rigorous — used when the formulas no longer reflect reality.

The CPI-based method (EAC = BAC ÷ CPI) is the workhorse: if you're getting 80 cents of value per dollar (CPI 0.8), the whole budget will cost proportionally more to deliver. The variance at completion (VAC = BAC − EAC) then tells you the forecast overrun or underrun.

EAC calculator

Set the budget, the work complete (which gives earned value), and the actual cost to date. The calculator derives CPI and forecasts the EAC and variance at completion:

Using the EAC well

Recalculate the EAC every reporting period, choose the method that fits the situation (CPI-based as default; bottom-up when the formulas break down; the pessimistic CPI×SPI form when schedule pressure is driving cost), and report the EAC and VAC alongside the curve. Treat a deteriorating EAC as a call to action, not just a number — it exists to prompt correction.

Ten things to remember

1. The EAC forecasts the total cost at completion from performance to date.
2. The BAC is what you planned; the EAC is what you'll get.
3. EAC = AC (spent) + ETC (still to come) — the art is forecasting the ETC.
4. CPI-based EAC = BAC ÷ CPI — the workhorse, evidence-based method.
5. Methods range optimistic → pessimistic — plan, CPI, CPI×SPI, bottom-up.
6. VAC = BAC − EAC — the forecast overrun (negative) or underrun (positive).
7. CPI 0.8 at 40% done → ~25% overrun, known now — the early warning is the point.
8. Recalculate every period and choose the method that fits the situation.
9. Don't cling to the budget when the EAC disagrees — believe the EAC and act.
10. The EAC is the headline output of cost control — measurement turned into foresight.