Estimate at Completion (EAC): Formulas & Example [2026]

Every project starts with a budget, and every running project tells you, through its own numbers, what it will really cost. Estimate at completion turns those numbers into a forecast: it takes what the project has spent and achieved so far and projects the final cost. The catch is that there are four ways to make that projection, and picking the wrong one is one of the most common errors on the PMP. This guide explains estimate at completion in full — the four EAC formulas and when to use each, plus ETC, VAC, TCPI, a worked example, and how it is tested on the PMP and CAPM exams.

What is estimate at completion (EAC)?

Estimate at completion (EAC) is a forecast of a project's total cost by the time it finishes, calculated from how the project is actually performing rather than from the original plan. Where the budget at completion (BAC) is the total budget you set at the start, EAC is the revised number reality points to once work is underway.

It answers the question every sponsor eventually asks: "given where we are, what will this really cost?" EAC updates the original budget with a projection grounded in earned value — the actual cost, the value earned, and the efficiency the project has shown so far. Because it draws on performance data, EAC becomes meaningful only once a project is far enough along to have a track record, typically after it is 10–20% complete, at which point it is usually the most reliable cost figure available.

To keep it concrete, we will follow one project through the whole guide: the Cedar Street office renovation, a fit-out with a budget at completion (BAC) of $500,000. Five months in, the crew has completed $200,000 of budgeted work, its earned value (EV), but has already spent $250,000 doing it (the actual cost, AC). That is a CPI and SPI of 0.80: the renovation is running both over budget and behind schedule. Every section below forecasts this same project a different way. Picture it as a forecast "fan": the money spent runs to today, then splits into different final costs depending on how the rest of the fit-out goes.

The four EAC formulas and when to use each

There is no single EAC formula — there are four, and which one is correct depends entirely on your assumption about how the rest of the project will go. This is the heart of EAC and the single most tested point on the exam:

All four methods do the same thing: they price the remaining work under an assumption, and add it to what has already been spent. The only real difference between them is the assumption. Take them one at a time.

Forecasting EAC with present CPI assumes the project will keep performing the way it has been performing. If you have been paying $1.25 for every $1.00 of work, the remaining work will cost $1.25 per dollar too. Use it when the cause of the overrun is built into the project: labor rates came in higher, the work is more complex than planned, the team is slower than estimated. Those conditions do not disappear, so the efficiency will not either. This is the most common method, because most overruns are exactly this kind.

Forecasting EAC with "future costs as planned" assumes the problem is behind you. Something went wrong once, it was paid for, and it will not happen again: a piece of equipment failed, a storm stopped work, a supplier made a one-time error. The money is gone, but there is no reason the remaining work should cost more than the budget said. So the remaining work is priced at the original planned rate.

Forecasting EAC with present CPI and SPI assumes things are worse: the cost problem continues and the project is behind schedule in a way that adds cost, because running late is itself expensive. Extra weeks mean extra overhead, and pressure to catch up means overtime and rushed work. Dividing by CPI × SPI makes the forecast harsher than CPI alone, which is why this is the most pessimistic of the three calculations.

The bottom-up EAC stops projecting altogether. When the original estimate is no longer a valid basis, because the scope or the approach has fundamentally changed, no formula built on it can be trusted. Instead, the team re-estimates the remaining work from scratch and adds it to what has been spent.

To tell them apart under exam pressure, ask one question about the overrun: will it continue? If no, use "future costs as planned." If yes and it is a cost problem only, use present CPI. If yes and the schedule slip is compounding it, use present CPI and SPI. And if the original plan itself is no longer believable, stop forecasting from it and build a bottom-up EAC.

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Worked example: calculating EAC

Running the Cedar Street renovation (BAC $500,000, EV $200,000, AC $250,000, a CPI and SPI of 0.80) through the three calculated EAC formulas gives very different forecasts:

Notice the spread: the same renovation can be forecast to finish at $550,000, $625,000, or nearly $719,000 depending purely on which assumption you make about the remaining work. The overrun is real (Cedar Street has spent $250,000 to earn only $200,000 of value), but how much it ultimately costs hinges on whether that inefficiency continues.

Estimate to complete (ETC)

Estimate to complete (ETC) is the forecast cost of the remaining work — everything from the status date to the finish. Where EAC is the total, ETC is just the part still ahead of you:

> ETC = EAC − AC

Using Cedar Street's first forecast, with an EAC of $625,000 and $250,000 already spent, ETC = $625,000 − $250,000 = $375,000 of work still to fund. ETC can also be built from scratch as a bottom-up estimate when the formula-based figure is not trusted, which is exactly the case that feeds the fourth EAC formula above. It is the number a project manager takes to a sponsor when asking what remains to be spent.

Variance at completion (VAC)

Variance at completion (VAC) is the forecast overrun or underrun — the gap between what you budgeted and what you now expect to spend:

> VAC = BAC − EAC

For the Cedar Street renovation, with a BAC of $500,000 and an EAC of $625,000, VAC = $500,000 − $625,000 = −$125,000. As with the other EVM variances, the sign convention holds: negative is bad, so a −$125,000 VAC is a forecast $125,000 overrun. VAC is the single figure that tells a sponsor, in advance, how far off the budget the project is heading. It belongs next to EAC in any status report, even though many guides skip it.

To-complete performance index (TCPI)

The to-complete performance index (TCPI) flips the question around: instead of forecasting where you will land, it asks how efficient you must be on the remaining work to still hit a target. To hit the original budget:

> TCPI = (BAC − EV) ÷ (BAC − AC)

For Cedar Street, TCPI = (500,000 − 200,000) ÷ (500,000 − 250,000) = 300,000 ÷ 250,000 = 1.20. That means the team would have to work at 120% efficiency, getting $1.20 of value per dollar, for the rest of the project just to finish on the original budget, after running at 0.80 so far. A TCPI above 1.0 is a red flag: it says recovery requires performing better than planned, which a project already behind rarely manages. (To hit a revised EAC target instead of BAC, the denominator becomes EAC − AC.)

Estimate at completion on the PMP® and CAPM® Exams

On the PMP exam, estimate at completion is a staple of the cost-forecasting questions, and the difficulty is rarely the arithmetic — it is choosing the right formula. A question will describe the situation in words: is the overrun ongoing, or a one-time event? Will the schedule keep dragging on cost, or not? The wording tells you which assumption applies, and therefore which EAC formula to use. Memorizing the four formulas is necessary but not sufficient; the exam rewards matching them to the scenario.

You are also expected to compute and interpret ETC, VAC, and TCPI, and to know that a TCPI above 1.0 signals a recovery that demands better-than-planned performance. The CAPM tests the same forecasting formulas a little more directly, often a single EAC or ETC calculation, but still expects you to read the scenario's assumption. Our PMP Complete Study Guide, the most complete on the market, drills the formula-selection logic with worked scenarios until picking the right EAC is automatic.

PMP Practice Question: Estimate at Completion

A project has a budget at completion (BAC) of $300,000. At the status date, earned value is $120,000 and actual cost is $150,000. The cost overrun was caused by a one-time equipment failure that has been resolved and will not recur. The project manager needs to forecast the final cost.

Which EAC calculation should the project manager use?

a) EAC = BAC ÷ CPI = $375,000, reflecting the project's cost performance to date.

b) EAC = AC + (BAC − EV) = $330,000, since the overrun was a one-off and the remaining work should proceed at the budgeted rate.

c) EAC = AC + [(BAC − EV) ÷ (CPI × SPI)], to account for cost and schedule inefficiency continuing.

d) EAC = BAC = $300,000, since the original budget remains the target.

Correct answer: B.

Rationale: The decisive detail is that the overrun was a one-time event that will not recur. That makes the current cost variance atypical, so the remaining work should be forecast at the planned rate, not at the depressed efficiency the failure caused. The right formula is EAC = AC + (BAC − EV) = $150,000 + ($300,000 − $120,000) = $330,000: the money already spent plus the remaining work at budget. Choice a) is the trap for anyone who reaches for the most common formula on autopilot: EAC = BAC ÷ CPI assumes the overrun is typical and continuing, which the scenario explicitly rules out; it would wrongly forecast $375,000 by baking a resolved one-off into the rest of the project. Choice c) is even more wrong for this case, assuming both cost and schedule inefficiency persist when neither should. Choice d) ignores reality entirely: the project has already overspent, so it cannot finish at exactly the original $300,000. Only b) matches the forecast to the scenario's stated assumption. To drill this kind of formula-selection question under exam conditions, work through our PMP practice exams or, at the entry level, our CAPM practice exams.

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