Unformatted text preview: , Page 228 it is the earned cost, rather than the earned labor-hours. When using Modern Project on a government project, you can get the earned cost (BCWP) by multiplying the Control cost budget (from the Cost Comparison Report) by the percent complete. 8.3.4— Additional Performance Measures All of the performance measures used on government projects can be obtained from Modern Project. Most of them are performance measures already included in Modern Project that have names different from those commonly used on commercial projects. In this section we discuss most of them. The cost and schedule variances used on government projects are computed in dollars, rather than in man-hours. While the variance analysis techniques taught in this book involve computing the cost and schedule variances at every level in the WBS hierarchy to assist the project manager in isolating problem control packages, government program managers are often interested only in the cost and schedule variance for the total project. There are several reasons for this that are beyond the scope of this section, but one of the reasons has to do with the product orientation of the government work breakdown structures. Government project offices are often more interested in the cost or schedule variances for a product or subproduct than for work packages. Also, because the materials, equipment, and other costs consumed by a work package are not always allocated to that work package or to the control account that contains it, whereas they usually are for products, makes the extra work of computing these variances for work packages appear unnecessary to them. In any event, computing the total cost and schedule variances in dollars is easy once the ACWP, BCWP, and the BCWS have been computed for the project. In fact, the government defines them as follows: Page 229 Cost Variance: CV = BCWP –ACWP Schedule Variance: SV = BCWP –BCWS In addition to the cost and schedule variances for the project, they define the "Variance at Completion" (VAC), the "Cost Variance Percentage" (CV%), and the "Schedule Variance Percentage" (SV%). These are all usually computed at the total project level but theoretically make sense at any level of the WBS hierarchy. They are defined as follows: Variance at Completion: VAC = BAC –EAC Coast Variance Percentage: CV% = CV/BCWP Schedule Variance Percentage: SV% = SV/BCWS The CV% is simply the percentage of the BCWP the CV represents, and the SV% is the percentage of the BCWS the SV represents. Notice that the denominators in the last two definitions are different. The BCWP is how much cost has been earned at "time now," whereas the BCWS is how much cost has been scheduled at "time now." Clearly, the CV applies only to how much cost has been earned, not to the total cost, and the SV applies only to how much cost has been scheduled. As time progresses, the BCWP and the BCWS will grow, and so will the CV and SV Therefore, the CV% and the SV% will continually change. In additi...
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This note was uploaded on 01/11/2011 for the course ACC 9 taught by Professor Yeetan during the Spring '10 term at Sunway University College.
- Spring '10