What is variance at completion?

Question

What is variance at completion?

Answer 1

The short answer is that Variance at Completion is the difference between the Budget at Completion minus the Estimate at Completion.

If that's gobbledygook, let me see if this helps explain things a little better.  The total amount budgeted for a project (the starting budget plus any interim adjustments) is the Budget at Completion.  The Estimate at Completion really comes down ultimately to the actual costs by the time the project is completed.  More precisely, it means the amount estimated, plus interim adjustments to the estimate.  But by the time of actual completion, the total costs are actually known, because the project has been completed.  Therefore the Estimate at Completion isn't really an "estimate" any more--it's a real number representing the amount actually spent.

So, back to the original equation:  VAC (Variance at Completion) means the BAC (Budget at Completion) - EAC (Estimate at Completion, or real costs).   In other words, a project is over budget if VAC is a negative number (EAC greater than BAC) and it is under budget if VAC is positive (BAC greater than EAC).

I hope this helps.  Good luck!!