The Use of EAC (Estimate at Completion) in Project Tracking

Estimate at Completion (EAC) the single most powerful number in project cost management. It tells you, right now, what your project is realistically going to cost by the time it’s done. Not what you hoped. Not what you planned. What it will actually cost, based on how things are going today.

In this guide, you’ll learn exactly what EAC is, the four formulas to calculate it, how to pick the right one, and how to use it to keep your project — and your stakeholders — on track.

What Is EAC in Project Management?

Estimate at Completion (EAC) is a forecasting metric that predicts the total cost of a project based on current performance data. It answers one critical question:

“Given what we know right now, how much will this entire project cost?”

EAC is a core component of Earned Value Management (EVM) and is used at regular intervals throughout a project’s life cycle. Every time something unexpected happens — a delay, a cost overrun, a scope change — EAC is recalculated to give stakeholders an updated picture of where the project is headed financially.

EAC vs. BAC — What’s the Difference?

These two metrics are often confused, but they serve very different purposes:

Think of BAC as the destination on your GPS. EAC is what the GPS recalculates when you hit unexpected traffic.

EAC vs. ETC — Another Important Distinction

ETC (Estimate to Complete) is the expected cost of finishing the remaining work. EAC includes what you’ve already spent:

EAC = AC + ETC

Where AC = Actual Cost (money spent so far).

The 4 EAC Formulas — and When to Use Each

This is what most EAC guides get wrong: there isn’t one EAC formula. There are four, and choosing the right one depends on why your project is deviating from the plan.

Formula 1: EAC = AC + Bottom-Up ETC

Use when: Your original estimate is no longer valid and you need a fresh, detailed estimate for remaining work.

EAC = AC + New ETC

This is the most accurate but also the most time-consuming formula. Use it when something fundamental has changed — a new scope, a key team member leaving, or a complete rethinking of the approach.

Example: You’ve spent $80,000 (AC). After reassessing the remaining work, your team estimates it will cost $140,000 more to finish. EAC = $80,000 + $140,000 = $220,000.

Formula 2: EAC = BAC ÷ CPI

Use when: Your current cost performance is expected to continue for the rest of the project.

EAC = BAC ÷ CPI

Where CPI (Cost Performance Index) = EV ÷ AC And EV (Earned Value) = the budgeted value of work actually completed.

This is the most commonly used EAC formula. If your team has been consistently over or under budget, this assumes that trend won’t change.

Example: BAC = $200,000. You’ve completed 40% of work, so EV = $80,000. You’ve spent $100,000, so AC = $100,000.

• CPI = $80,000 ÷ $100,000 = 0.8 (spending $1.25 for every $1 of value)
• EAC = $200,000 ÷ 0.8 = $250,000

Formula 3: EAC = AC + (BAC − EV)

Use when: The variance so far was a one-time event and future work will proceed at the original planned rate.

EAC = AC + (BAC − EV)

This formula says: “What happened, happened — but from here, we’ll stick to the original plan.” Use it when an unexpected event (a one-off delay, an equipment breakdown) caused the overrun, but normal efficiency resumes from now on.

Example: BAC = $200,000. EV = $80,000. AC = $100,000.

• EAC = $100,000 + ($200,000 − $80,000) = $100,000 + $120,000 = $220,000

Formula 4: EAC = AC + [(BAC − EV) ÷ (CPI × SPI)]

Use when: The project is behind on both cost AND schedule, and both are expected to affect future performance.

EAC = AC + [(BAC − EV) ÷ (CPI × SPI)]

Where SPI (Schedule Performance Index) = EV ÷ PV and PV (Planned Value) = the budgeted value of work that should have been done by now.

This is the most conservative formula — it factors in schedule pressure, which often drives up costs further.

Example: BAC = $200,000. EV = $80,000. AC = $100,000. PV = $110,000.

• CPI = 0.8, SPI = $80,000 ÷ $110,000 = 0.73
• EAC = $100,000 + [($200,000 − $80,000) ÷ (0.8 × 0.73)]
• EAC = $100,000 + [$120,000 ÷ 0.584] = $100,000 + $205,479 = $305,479

Quick Formula Reference

A Real-World EAC Example: The Construction Project

Let’s walk through a complete scenario.

The setup: You’re a project manager at a mid-sized civil engineering firm. You’re overseeing the construction of a commercial building. The project is planned for 12 months with a total budget (BAC) of $700,000. The plan allocates $400,000 to the first quarter and $100,000 per quarter for the remaining three.

Month 3 reality check:

• Planned Value (PV): $400,000 (you should have completed the first quarter’s work)
• Earned Value (EV): $320,000 (you’ve only completed 80% of that work)
• Actual Cost (AC): $380,000 (you’ve already spent $380,000)

Step 1: Calculate CPI CPI = EV ÷ AC = $320,000 ÷ $380,000 = 0.84 You’re getting only $0.84 of value for every $1 spent.

Step 2: Calculate SPI SPI = EV ÷ PV = $320,000 ÷ $400,000 = 0.80 You’re only 80% as far along as you should be.

Step 3: Choose your formula Since you’re behind on both cost and schedule, use Formula 4.

Step 4: Calculate EAC EAC = $380,000 + [($700,000 − $320,000) ÷ (0.84 × 0.80)] EAC = $380,000 + [$380,000 ÷ 0.672] EAC = $380,000 + $565,476 EAC = $945,476

That’s $245,476 over the original budget. This is the number you now take to your stakeholders — not a guess, but a data-driven forecast that gives everyone time to make decisions while there’s still room to act.

How to Use EAC Proactively (Not Just Reactively)

Most project managers calculate EAC after something goes wrong. The best ones calculate it continuously — and that changes everything.

Here’s how to use EAC as a proactive management tool:

1. Calculate EAC at every reporting cycle. Whether that’s weekly or fortnightly, a trending EAC tells you if things are improving or getting worse. A single EAC is a snapshot; multiple EACs over time are a story.
2. Pair EAC with CPI and SPI together. EAC alone tells you the forecast. CPI tells you why costs are off. SPI tells you how schedule pressure is making it worse. Track all three together.
3. Use the “Variance at Completion” (VAC) check. VAC = BAC − EAC. A negative VAC means you’re headed for an overrun. How negative is it? That determines whether you need a conversation with stakeholders or a complete replanning exercise.
4. Build a budget buffer from day one. The most common reason EAC exceeds BAC isn’t bad luck — it’s that no buffer was planned. Reserve 5–15% of BAC as contingency reserve, so that when EAC rises, it rises into the buffer, not into crisis.
5. Run scenario analysis. Calculate EAC using multiple formulas before a major phase gate. If all four formulas give you a similar number, that’s a reliable forecast. If they diverge wildly, your data quality or assumptions need review.

EAC and Stakeholder Communication

One of EAC’s most underused applications is stakeholder reporting. A rising EAC is uncomfortable to share — but sharing it early is always better than sharing it late.

When presenting EAC to stakeholders, frame it around three things:

• What the current forecast is (the EAC number)
• Why it changed from BAC (CPI, SPI, one-off event)
• What you’re doing about it (corrective actions, resource reallocation, scope adjustments)

A well-communicated EAC builds trust. A hidden one destroys it.

Common EAC Mistakes to Avoid

Using only one formula for every situation. Each formula makes different assumptions. Match the formula to the reality of your project.

Calculating EAC only once. EAC is a living number. Projects that update it monthly catch problems early; those that calculate it once at project start are flying blind.

Ignoring schedule in your cost forecast. Schedule delays always cost money — in extended labour, penalties, or delayed revenue. Formula 4 exists for exactly this reason.

Confusing EAC with ETC. ETC is what’s left to spend. EAC is the total — past plus future. Mixing them up leads to significantly underestimated forecasts.

Key EAC Terms: Quick Reference

Final Thoughts

EAC is one of those metrics that seems complicated until you use it — and then you wonder how you ever managed a project without it. The formulas are simple. The discipline of calculating it regularly is what separates average project managers from exceptional ones.

If you’re preparing for your PMP exam, EAC questions are guaranteed to appear — and they reward candidates who understand when to apply each formula, not just how to calculate it.

At ShriLearning, our PMP training courses walk you through EVM, EAC, and every other earned value metric with real examples, practice questions, and expert guidance — so you’re ready for exam day and for the real world.

Related reads:

• Project Estimating Techniques: Top-Down vs. Bottom-Up Explained
• Why Do Projects Fail? Avoid These 5 Common Mistakes
• How to Pass the PMP Exam on Your First Attempt

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