HKSM
Budget at Completion (BAC)
The total planned cost for completing the entire project, calculated by adding up all approved budgets for the work to be done.
Key Points
- BAC is the project's total approved budgeted amount at completion (the cost baseline total).
- In earned value management, BAC is used to calculate variance at completion: VAC = BAC - EAC.
- BAC typically equals the total planned value (PV) at the project's finish and usually excludes management reserve.
- BAC changes only through approved updates to the cost baseline via change control.
Example
A project has budgets of $250,000 for design, $150,000 for build, and $100,000 for testing. The BAC is $500,000, the sum of all those planned budgets.
PMP Example Question
Which earned value term is defined as "The sum of all budgets established for the work to be performed."?
- Actual Cost (AC)
- Budget at Completion (BAC)
- Estimate at Completion (EAC)
- Planned Value (PV)
Correct Answer: B — Budget at Completion (BAC)
Explanation: BAC represents the total approved budget for all planned work, i.e., the aggregated project budget at completion.
