How to Calculate EAC (Estimate at Completion)
The Estimate at Completion (EAC) is the forecasted total cost of a project based on current performance data. Unlike the Budget at Completion (BAC), which is fixed, EAC is dynamic — it changes as the project progresses and new performance data becomes available.
The PMBOK® Guide 6th Edition defines four distinct EAC formulas, each appropriate for a different situation. Choosing the wrong formula produces a meaningless forecast. This guide explains all four methods with worked examples.
What EAC Tells You
EAC answers: "Given what we know today about how the project is performing, how much will this project cost in total?"
- If EAC > BAC: the project is projected to exceed its budget
- If EAC = BAC: the project is projected to finish exactly on budget
- If EAC < BAC: the project is projected to finish under budget
The related metrics: ETC (Estimate to Complete) = EAC − AC, and VAC (Variance at Completion) = BAC − EAC.
The 4 EAC Formulas (PMBOK 6th Ed.)
Method 1: Typical Performance Continues (Most Common)
Use when: The current cost performance rate (CPI) is expected to continue for the remainder of the project. This is the default formula used in most EVM software and by most PMs when there is no specific reason to believe performance will change.
Example: BAC = $500,000. CPI = 0.90. EAC = 500,000 ÷ 0.90 = $555,556
The project is projected to cost $55,556 more than budgeted.
Method 2: Variance Was a One-Time Event
Use when: The cost variance that occurred was caused by a specific, non-recurring event (e.g., a delivery delay, an equipment failure, or a one-time price spike). You expect all remaining work to be completed at exactly the originally budgeted rates.
Example: AC = $110,000, BAC = $500,000, EV = $100,000. EAC = 110,000 + (500,000 − 100,000) = $510,000
The $10,000 overrun is locked in, but future work is expected to run at plan.
Method 3: Remaining Work at Current CPI (Precise Version of Method 1)
Use when: You want to explicitly account for actual costs already incurred plus an estimate for the remaining work at the current CPI efficiency level. Mathematically equivalent to Method 1, but the derivation makes the logic clearer.
Example: AC = $110,000, BAC = $500,000, EV = $100,000, CPI = 0.909. EAC = 110,000 + [(400,000) ÷ 0.909] = 110,000 + 440,110 = $550,110
Method 4: Both Cost and Schedule Performance Impact
Use when: The project is behind schedule AND has a fixed deadline that cannot be moved. To recover the schedule, the team must work overtime or add extra resources — which increases costs. This formula factors in the additional cost burden of schedule recovery.
Example: AC = $110,000, BAC = $500,000, EV = $100,000, CPI = 0.909, SPI = 0.833. EAC = 110,000 + [400,000 ÷ (0.909 × 0.833)] = 110,000 + 527,836 = $637,836
EAC Decision Guide
| Situation | Best EAC Formula |
|---|---|
| Normal project, no special circumstances | EAC = BAC / CPI |
| One-time overrun, future work on plan | EAC = AC + (BAC − EV) |
| Ongoing inefficiency in remaining work | EAC = AC + (BAC − EV) / CPI |
| Behind schedule with a fixed deadline | EAC = AC + (BAC − EV) / (CPI × SPI) |
| Bottom-up re-estimate of remaining work | EAC = AC + new ETC estimate |
Complete Step-by-Step Example
A highway construction project has the following status at month 6 of 12:
- BAC = $2,000,000
- PV = $1,100,000 (55% of work was planned to be done by now)
- EV = $900,000 (45% of work is actually complete)
- AC = $1,050,000 (actual spending to date)
SPI = EV ÷ PV = 900,000 ÷ 1,100,000 = 0.818
EAC (Method 1) = 2,000,000 ÷ 0.857 = $2,334,888
ETC = EAC − AC = 2,334,888 − 1,050,000 = $1,284,888
VAC = BAC − EAC = 2,000,000 − 2,334,888 = −$334,888
The project is projected to cost approximately $335,000 more than its approved budget. The project manager should escalate this to the project sponsor and evaluate corrective options.
EAC vs. BAC vs. ETC: Summary
| Term | Formula | What it represents |
|---|---|---|
| BAC | Fixed at project start | Total approved budget |
| EAC | BAC / CPI (most common) | Projected total cost at completion |
| ETC | EAC − AC | Estimated cost to finish remaining work |
| VAC | BAC − EAC | Budget surplus (+) or deficit (−) at completion |