# Estimate at completion formulas: choose the assumption first

Compare estimate at completion formulas with one worked project example, clear assumptions for remaining work, and practical checks before using a forecast.

Source: https://tirtle.com/blog/estimate-at-completion-formulas
Publisher: Tirtle | Updated: 2026-10-10

## The short answer

Estimate at completion, EAC, is a forecast of total project cost. Choose the formula that matches your assumption about the remaining work. Current cost efficiency, a one-time variance, combined cost and schedule effects, and a fresh bottom-up estimate produce different forecasts for good reasons.

## Start with actual cost plus remaining cost

The basic relationship is EAC = AC + ETC, where ETC is the estimate to complete. The question is how you estimate what remains. A performance-based formula is one method; a new estimate from the people responsible for the remaining work is another.

Use an original example with BAC = $100,000, EV = $40,000, AC = $50,000, and PV = $50,000. CPI = 0.80 and SPI = 0.80. The unearned budget is BAC - EV = $60,000. The amounts below are forecasts under different assumptions, not competing claims of certainty.

## If current cost efficiency is expected to continue

Use EAC = BAC / CPI. Here, $100,000 / 0.80 = $125,000. This extends the observed cost efficiency across the work. The equivalent expression is AC + (BAC - EV) / CPI, using CPI calculated from the same cumulative EV and AC.

That equivalence matters when checking your arithmetic. $50,000 + $60,000 / 0.80 also equals $125,000. Do not add AC again to BAC / CPI; that would count incurred cost twice. Use unrounded indices where practical and round the final result appropriately.

## If the remaining work will follow the original rate

Use EAC = AC + (BAC - EV). Here, $50,000 + $60,000 = $110,000. The current variance remains, but the future work is forecast at its original budgeted cost. This could fit a one-time problem that has been resolved when evidence supports that conclusion.

It should not become the default because it gives a lower number. If the same productivity problem is likely to continue, forecasting the remaining work at the planned rate hides that expectation. State the reason the past variance is considered unusual.

## If cost and schedule performance affect remaining cost

A commonly taught combined-performance formula is EAC = AC + (BAC - EV) / (CPI × SPI). For this example, it is $50,000 + $60,000 / 0.64 = $143,750. It models both indices influencing the cost of unfinished work.

Use this only when the scenario or forecasting method supports that relationship. An SPI below 1 does not automatically require this formula. It also does not convert directly into days of delay. A schedule forecast needs schedule analysis, and the chosen cost model needs a defensible assumption.

## If the original estimate is no longer useful

Ask the team for a bottom-up ETC based on the remaining tasks, rates, risks, and constraints. If that ETC is $72,000, EAC = $50,000 + $72,000 = $122,000. This is a fresh estimate rather than a mechanical extension of an index.

Before presenting any result, name the assumption, source date, scope, and remaining uncertainty. Compare EAC with BAC without automatically changing the approved baseline. A forecast describes what you expect; approval of additional funding or a baseline change is a separate decision.

## Your next step

Choose the forecast assumption before the formula. EAC is useful when the reader understands what must remain true for that number to be credible.

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## Sources

- [Earned value management](https://www.pmi.org/blog/earned-value-management) | Project Management Institute
- [PMI Lexicon of Project Management Terms (registration may be required)](https://www.pmi.org/standards/lexicon) | Project Management Institute

## Keep learning

- [Earned value management formulas, explained with one example](https://tirtle.com/blog/earned-value-management-formulas)
- [CPI and SPI worked examples: read both sides of performance](https://tirtle.com/blog/cpi-spi-worked-examples)
- [Project budget vs cost baseline: make the reserves clear](https://tirtle.com/blog/project-budget-vs-cost-baseline)

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