Estimate at Completion (EAC): Formulas and Examples

What is estimate at completion (EAC)?

Estimate at completion (EAC) is the expected total cost of a project, or of a work package or control account, when all of its work is complete. It is calculated as the actual cost to date plus the estimate to complete (EAC = AC + ETC). EAC is compared with the budget at completion (BAC) to show whether the project is heading for an overrun or an underrun.

EAC is one of the forecasting measures in earned value management. The other measures tell you where the project stands today: the cost performance index shows cost efficiency, and cost variance and schedule variance show how far you are from plan. EAC turns that history into a forecast of the final bill.

The key distinction is between EAC and BAC. The budget at completion is the approved budget for all the work and only changes through formal change control. EAC is your current best forecast and can change every reporting period. When EAC drifts above BAC, the gap is a warning that needs a decision, not just a note in the report.

In PMI's PMBOK Guide, forecasting sits within cost control. In the eighth edition (published late 2025), cost work falls under the Finance performance domain, whose processes include monitoring and controlling finances. The formulas themselves are the long-established earned value formulas used across PMI's standards and most project controls guidance.

The inputs you need

Every EAC formula is built from a small set of earned value figures. Get these right first; a precise formula applied to poor data gives a precise-looking wrong answer.

Two data points matter most. EV depends on honest progress measurement: if tasks are reported as 80% done for weeks, EV is inflated and every forecast looks better than it should. Agree objective rules, such as 0/100 or 50/50 for short tasks and milestones for longer ones, at work package level. AC must include costs incurred but not yet invoiced, such as accrued contractor hours, or the project will look cheaper than it is.

The time-phased baseline behind PV is usually plotted as an S-curve.

The four EAC formulas

PMI's earned value guidance describes four standard ways to forecast EAC. Each makes a different assumption about how the remaining work will perform.

1. EAC = BAC / CPI (typical variance)

This is the most common formula and the default in many tools. It assumes the project will keep spending at the same efficiency for the rest of its life. If the team is delivering 82 cents of value for every dollar spent, the formula assumes that will continue. It is mathematically the same as EAC = AC + (BAC - EV) / CPI.

Use it when the cause of the overrun is structural: labour rates higher than planned, productivity lower than estimated, or a complexity that affects all the remaining work. Once a good share of the work is done, the cumulative CPI tends to move slowly, because each new period adds only a little to the total. That is why many project controllers treat this formula as the realistic baseline forecast.

2. EAC = AC + (BAC - EV) (atypical variance)

This formula adds the original budget for the remaining work to what has already been spent. It assumes the past variance was a one-off and will not repeat: a supplier failure, a single piece of rework or a one-time price spike.

It is the most optimistic of the four when a project is over budget, so use it only when you can explain why the cause has gone away. Defaulting to it because it gives the smallest number is one of the most common forecasting mistakes.

3. EAC = AC + (BAC - EV) / (CPI x SPI)

This version adjusts the remaining work for both cost and schedule performance. It suits projects that are behind schedule and have a fixed end date, where catching up will mean overtime, extra people or expedited delivery, all of which cost more.

Because CPI x SPI is smaller than CPI when the project is late, this usually gives the highest EAC when both indices are below 1. Some organisations use a weighted version, such as AC + (BAC - EV) / (0.8 x CPI + 0.2 x SPI), to give schedule pressure some influence without letting it dominate. The weights are a local convention, not a standard, so state them in your cost management plan.

4. EAC = AC + bottom-up ETC

Here you ignore the indices and re-estimate the remaining work from the bottom up, task by task, using current knowledge of scope, rates and risks. It is the most effort but often the most credible when the plan has changed: a redesign, a new supplier, approved scope changes or a fundamentally different delivery approach.

A bottom-up ETC uses the same techniques as the original estimate; see cost estimation and effort estimation.

How to calculate EAC step by step

1. Confirm BAC. Use the current approved budget, including any approved changes. Exclude management reserve, which sits outside the performance baseline.
2. Measure EV. Apply your agreed percent-complete rules to each work package and add them up.
3. Collect AC. Include all costs incurred for the work done, including accruals and committed costs that relate to completed work.
4. Find PV. Read the planned value for the status date from the baseline.
5. Calculate CPI and SPI. CPI = EV / AC; SPI = EV / PV.
6. Calculate the formula EACs. Work out all three index-based formulas; they take seconds once the inputs are known.
7. Ask why the variance happened. This determines which formula is most realistic.
8. Prepare a bottom-up ETC if the plan has changed or if the formulas disagree widely.
9. Derive ETC, VAC and TCPI from your chosen EAC.
10. Report a preferred EAC, the range, the reasons and the actions you recommend.

Worked example: an over-budget project

A website rebuild has a budget of $200,000 over eight months. At the end of month four:

• Planned value (PV) = $80,000
• Earned value (EV) = $70,000 (35% of the work is done)
• Actual cost (AC) = $85,000

So CPI = 70,000 / 85,000 = 0.8235, SPI = 70,000 / 80,000 = 0.875, and the budgeted value of the remaining work is BAC - EV = $130,000. The project is both over budget and behind schedule.

The forecasts range from $215,000 to $265,408. Which one to report depends on the cause. Suppose the investigation shows that the main driver is a senior developer day rate 15% above the estimate, and that developer is staying to the end. The cause is ongoing, so BAC / CPI = $242,857 is the most defensible forecast. The bottom-up figure of $225,000 would need a credible explanation of why efficiency will improve.

From the chosen EAC:

• ETC = EAC - AC = 242,857 - 85,000 = $157,857 still needed.
• VAC = BAC - EAC = -$42,857, a forecast overrun of about 21%.
• TCPI to meet BAC = (BAC - EV) / (BAC - AC) = 130,000 / 115,000 = 1.13. The remaining work would need to be 13% more efficient than planned, while the team is currently running 18% less efficient. That is not realistic without a change in scope or approach.
• TCPI to meet the EAC = (BAC - EV) / (EAC - AC) = 130,000 / 157,857 = 0.82, which equals the current CPI, as you would expect for this formula.

The same project data is used in our guides to earned value management, CPI and cost variance, so you can follow the numbers across all of them.

Worked example: an under-budget project

EAC can also be lower than BAC. A small office move has a budget of $50,000. At the status date PV = $22,000, EV = $20,000 and AC = $18,000.

• CPI = 20,000 / 18,000 = 1.11 (under budget)
• SPI = 20,000 / 22,000 = 0.91 (slightly behind schedule)
• BAC - EV = $30,000 of work remaining

Here BAC / CPI is the most optimistic figure. A cautious project manager might report $48,000, because early savings often come from easier tasks and may not continue. A positive VAC is good news, but it may also mean the original estimate was padded; record the reason in your lessons learned so future estimates improve.

EAC, ETC, VAC and TCPI compared

These four forecasting measures are closely linked and often confused, especially in exam questions.

Reading the TCPI

The to-complete performance index is a reality check on any target. If TCPI to meet BAC is 1.13 and the current CPI is 0.82, the budget is very unlikely to be met by working harder. As a rough rule of thumb (our guidance, not a formal standard):

• TCPI below or close to the current CPI: the target is achievable at current performance.
• TCPI a little above CPI (up to about 0.05 to 0.10): achievable only with specific improvement actions.
• TCPI well above CPI: unrealistic; a re-plan, scope change or budget change is needed.

TCPI rises sharply late in a project because there is less work left over which to recover. If actual cost already exceeds BAC, the BAC-based TCPI becomes meaningless or negative, and only the EAC-based version is useful.

Which EAC formula should you use?

The right formula depends on why performance differs from plan, not on which answer looks best. Use this as a starting point:

Independent and management EACs

In formal earned value systems you will see two kinds of forecast. An independent EAC (IEAC) is calculated from the formulas, without anyone's judgement, and acts as a statistical check. A management EAC (sometimes called the estimate at completion of record) is the project manager's own forecast, usually built bottom-up. If the management EAC is much lower than the independent EACs, sponsors will expect a clear explanation of what will change.

Report a range, not a point

Showing the best case (AC + (BAC - EV)), the most likely case and the worst case (CPI x SPI) gives decision-makers a realistic picture. For high-uncertainty projects, a Monte Carlo simulation of the remaining work can produce a probability-based range, for example an 80% confidence EAC.

Calculating EAC in a spreadsheet

You do not need specialist software. With BAC in cell B1, PV in B2, EV in B3 and AC in B4, these formulas work in Excel and Google Sheets:

Track these each period in a row per status date so you can chart the trend. A rising EAC line is more informative than any single value. Our free budget template and project cost estimate template give you a structure for BAC and bottom-up estimates.

Most project management tools with budgeting features record planned and actual cost; check that yours can export the figures you need. Our project management software reviews cover which tools include budgeting and financial tracking.

Reporting EAC to sponsors

An EAC on its own invites the question "so what?". A useful forecast in a project status report includes:

• The preferred EAC and the range from the other methods.
• VAC in money and as a percentage of BAC.
• The trend: how EAC has moved over the last few periods.
• The main causes of the variance and whether they will continue.
• TCPI to show whether the budget is still achievable.
• Recommended actions: corrective measures, use of contingency, or a change request to rebaseline.

Agree thresholds in advance, such as escalating when VAC exceeds 5% or 10% of BAC, so a forecast overrun triggers a decision rather than a debate. If the overrun cannot be absorbed, it goes through change control for a revised budget. Keeping EAC visible every period is one of the core habits of cost control.

For the wider picture of forecasting finish dates and benefits as well as cost, read project forecasting.

Common mistakes

• Defaulting to AC + (BAC - EV) because it gives the smallest overrun, without evidence that the cause has gone away.
• Relying on one early CPI reading. Wait for a trend; early indices swing widely.
• Using poor progress data. Subjective percent complete inflates EV and flatters every forecast.
• Leaving out accruals and committed costs, so AC and EAC are understated.
• Confusing EAC with BAC or the funding limit. EAC is a forecast; BAC is the approved budget; funding may include management reserve.
• Including management reserve in BAC. Reserve sits outside the performance measurement baseline.
• Forecasting only at project level, which hides overrunning work packages.
• Reporting one number without the reasoning, which makes the forecast hard to trust or challenge.
• Not updating BAC after approved changes, so variance includes scope that was formally added.

EAC on the PMP exam

EAC questions appear regularly in PMP and CAPM preparation material. A few conventions help:

• If the question says the variance is typical or performance will continue, use BAC / CPI.
• If it says the variance is atypical, a one-off or will not recur, use AC + (BAC - EV).
• If it mentions both cost and schedule affecting the remaining work, or a firm deadline, use AC + (BAC - EV) / (CPI x SPI).
• If it says the original estimate is flawed or a new estimate has been made, use AC + ETC.
• Remember ETC = EAC - AC and VAC = BAC - EAC; a negative VAC means over budget.
• TCPI above 1 means the remaining work must be more efficient than planned.

Related guides

EAC is the forecasting end of a connected set of cost tools. Project cost management covers the full cycle from estimating to control, and the project budget guide shows how BAC is built.

To understand the measures EAC is built on, read our guide to earned value management.

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