Actual Cost (AC)
Actual Cost (AC) is the realized cost incurred for the work performed on an activity during a specific time period.
Explanation
Actual Cost, formerly known as Actual Cost of Work Performed (ACWP), represents the total costs actually incurred and recorded in accomplishing work during a given time period. AC includes all costs: labor, materials, equipment, overhead, and any other direct or indirect costs charged to the project.
AC has no upper limit in theory because overruns can exceed any planned amount. It is compared to EV to determine cost performance. If AC exceeds EV, the project is over budget for the work completed. If AC is less than EV, the project is under budget.
AC must be measured consistently with whatever was budgeted in PV and measured in EV. If PV includes only direct labor costs, then AC must also include only direct labor costs. This consistency is essential for meaningful EVM calculations.
Key Points
- •Formerly known as Actual Cost of Work Performed (ACWP)
- •Represents total costs incurred for completed work
- •Has no upper limit; can exceed planned amounts
- •Must be measured consistently with PV and EV for valid comparisons
Exam Tip
AC answers: What did the completed work actually cost? There is no upper limit for AC. Ensure AC is measured with the same cost elements as PV and EV.
Frequently Asked Questions
Related Topics
Earned Value (EV)
Earned Value (EV) is the measure of work performed expressed in terms of the budget authorized for that work.
Planned Value (PV)
Planned Value (PV) is the authorized budget assigned to scheduled work, representing the value of work planned to be completed by a given point in time.
Cost Variance (CV)
Cost Variance (CV) is an EVM metric that measures cost performance as the difference between earned value and actual cost: CV = EV - AC.
Cost Performance Index (CPI)
Cost Performance Index (CPI) is an EVM efficiency metric that measures cost performance as the ratio of earned value to actual cost: CPI = EV / AC.
Test your knowledge
Practice scenario-based questions on this topic with detailed explanations.