A project paid $300 in unexpected fees before breaking ground. If the project is 80% complete, the forecast for Estimate at Completion is which of the following?

A project paid $300 in unexpected fees before breaking ground. If the project is 80% complete, the forecast for Estimate at Completion is which of the following?

• A. Actual Cost + $300
• B. Actual Cost + Earned Value
• C. Actual Cost + Estimate to Completion
• D. Actual Cost + Estimate to Completion + $300

Answer: (D)

Estimate at Completion is the forecast of the total cost to finish the project. It is normally calculated as Actual Cost to date plus the Estimate to Complete. In this case, there was an unexpected $300 paid before any work began. That amount isn’t included in the cost incurred for work performed so far, but it still represents a cost needed to complete the project, so it must be added to the forecast. Therefore, EAC = AC + ETC + 300. Since 80% of the work is already done, ETC should reflect the cost to complete the remaining 20%, not the already incurred pre-project fee. The result is AC plus the remaining work forecast plus the $300 pre-project cost.

Estimate at Completion is the forecast of the total cost to finish the project. It is normally calculated as Actual Cost to date plus the Estimate to Complete. In this case, there was an unexpected $300 paid before any work began. That amount isn’t included in the cost incurred for work performed so far, but it still represents a cost needed to complete the project, so it must be added to the forecast. Therefore, EAC = AC + ETC + 300. Since 80% of the work is already done, ETC should reflect the cost to complete the remaining 20%, not the already incurred pre-project fee. The result is AC plus the remaining work forecast plus the $300 pre-project cost.