Hands On Tutorial Chapter 7: Cost Management
1) It is important to monitor and control project schedule and cost. Earned Value
Management (EVM) is a method used to identify the project performance. The
objective is to measure the project performance and relate it with the project goals.
Assume that you have completed the first six (6) months of the project. Given that the
value of Budget At Completion (BAC) was $550,000 for the ONE (1) year project. While
other information provided as follows :
Planned Value (PV) = $ 440,000
Earned Value (EV) = $ 380,000
Actual Cost = $ 330,000
i. Based on the information provided above, calculate the cost variance, schedule
variance, cost performance index (CPI) and schedule performance index (SPI) for
the project. (Show calculation).
ii. Use the CPI to calculate the estimate at completion (EAC) for this project. Is the
project performing better or worse than planned?
iii. Use SPI to calculate the time take to complete the project
iv. Explain the status of the project and its relationship between schedule and cost?
Justify your answer.
2) Given the project breakdown with stated cost apportioned by percent as follows:
Definition : 10%
Design : 40%
Implementation: 50%
With the total cost estimated is $ 600,000.00, calculate each of the Definition, and
implementation cost.
3) With the following information for TWELVE (12) months of the Interactive Street
Map application development project, answer the questions based on the
information provided. Rate of performance for the project identified is 40% at the
first four months of the project with the planned value includes the total cost of
labor of RM 30,000 and the total hardware and software cost is RM 50,000. Assume
the actual cost which consists of the direct & indirect cost is RM 30,000. A total of
RM 180,000 was planned as the budget at completion for this project.
i. Calculate the Earned Value based on the rate of performance at 40%.
ii. What is the Cost Variance and Schedule Variance for this project?
iii. Identify the Cost Performance Index (CPI) and Schedule Performance Index (SPI)
for the project. State the status of the project.
iv. Calculate the Estimate at Completion for this project.
v. Estimate the time taken to complete this project.