How do budget, actual cost, and earned value work together?

Budget, Actual Cost, and Earned Value

The current entry-based controls compare committed actual cost and production with available budgets. They provide useful cost and productivity indicators, but they are not yet a complete activity-level EVM baseline.

  • Actual Cost (AC) comes from committed daily labor, equipment, material, and subcontractor entries.
  • Theoretical advancement may be estimated from actual hours or quantities compared with planned values.
  • Reviewed physical progress must be confirmed separately. Consuming 50% of planned hours does not prove that 50% of the work is physically complete.

Reliable activity-level Planned Value, Earned Value, CPI, and SPI require an approved time-phased activity baseline plus reviewed physical progress. Use the Progress sheet to compare calculated advancement with the coordinator's assessment; do not treat current entry-mode indicators as final activity-level earned value.

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