Cost variance and schedule variance, Cost Accounting

Assignment Help:

(i) In terms of cashflow, which month will be the most costly for your project?

(ii) If the 3rd and 4th months are more expensive by 25% each because the outsourced labour took longer than expected, what is the effect on the final predicted project cost? What action do you think you could take in these circumstances? 

3(c) Assume you have completed three months of the project. The Budget at Completion (BAC) was $250,000 for this six-month project. Also assume the following:

Planned Value (PV) = $150,000

Earned Value (EV) = $140,000

Actual Cost (AC) = $125,000  

2343_Cost variance and schedule variance.png

Use this information to answer the following questions.

(i) What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project?

(ii) Use the CPI to calculate the estimate at completion (EAC) for this project. Use the SPI to estimate how long it will take to finish this project. Sketch an earned value chart using the above information, including the EAC point. Use the chart below (Figure 7-5, p.289 in Schwalbe 5ed) as an example of what your Earned Value Chart should look like. Comment on your chart.

(iii) How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget? Should you alert POSS senior management and ask for assistance?


Related Discussions:- Cost variance and schedule variance

Determine cost per unit using marginal & absorption costing, Determine Cost...

Determine Cost per Unit By Using Marginal and Absorption Costing The given information was extracted from the book of a company for the year ended on date 31/12/2001. Outpu

Calculate the break-even level of sales, Me ole cock spaniel plc. makes 3 p...

Me ole cock spaniel plc. makes 3 products, details as follows:   Apples (£)       Pears (£)         Cockneys (£)   Selling price        60               80

Generally accepted accounting principles, Generally Accepted Accounting Pri...

Generally Accepted Accounting Principles (GAAP) -Rules, conventions and procedures essential to define accepted accounting practice at a specific time. The highest level of such pr

Difference, difference between diffrential cost and marginal cost

difference between diffrential cost and marginal cost

The managing director is dubious , A  firm of printers  is contemplating  j...

A  firm of printers  is contemplating  joining  the uniform  costing  system operated by  its Trade Association but the Managing Director is dubious about the benefits of becoming

Methods for resolving transfer pricing conflicts, what are the advantages a...

what are the advantages and disadvantages of marginal costs plus a fixed lump-sum fee?

Evaluate the expected earning, During his career in the energy industry, T-...

During his career in the energy industry, T-Bone McAdams has accumulated $5,000,000 in "surplus savings" that he is planning to donate to his college alma mater, Oklahoma A&M, in

Cost behavior, maintenance costs at a hospital

maintenance costs at a hospital

Prepare a partial income statement, Timbatown Pty Ltd is a manufacturer of ...

Timbatown Pty Ltd is a manufacturer of timber tables and chairs. The company mostly sells on a retail basis to household consumers, but occasionally receives large orders for table

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd