VAC Calculator

Variance at Completion is the forecasted difference between what you originally budgeted for a project and what you now expect it to actually cost when all the work is done. It is a forward-looking metric that answers the question every sponsor dreads: "Are we going to finish over or under budget, and by how much?" A positive VAC means you expect to finish under budget -- money back in the organization's pocket. A negative VAC means you are heading for a cost overrun that needs to be managed, funded, or both.

VAC is part of the earned value management family of metrics, standing alongside Cost Variance (CV), Cost Performance Index (CPI), and Estimate at Completion (EAC). While CV tells you where you stand right now in terms of cost performance, VAC projects that performance forward to give you a preview of the final outcome. Think of CV as the snapshot and VAC as the forecast. Both are essential, but VAC is what ends up in the steering committee presentation because it speaks to the bottom line at project close.

In the PMBOK Guide, VAC is an output of the Control Costs process. It is calculated using the BAC (your original approved budget) and the EAC (your current forecast of the final cost). The EAC itself can be calculated several ways depending on your assumptions about future performance, which means your VAC is only as reliable as the EAC formula you chose. This is why understanding the relationship between CV, CPI, EAC, and VAC is critical for accurate project financial forecasting.

BAC (Budget at Completion) is your original, baselined total project budget. This number does not change unless you go through formal change control. EAC (Estimate at Completion) is your best current estimate of what the project will actually cost when finished. The EAC is typically calculated as EAC = BAC / CPI (if current cost efficiency continues) or EAC = AC + (BAC - EV) (if future work returns to planned rates).

The sign convention is straightforward and important. Positive VAC means EAC is less than BAC -- you are forecasted to spend less than budgeted. Negative VAC means EAC exceeds BAC -- you are forecasted to overspend. You can also express VAC as a percentage: VAC% = VAC / BAC x 100. This percentage is useful for comparing budget performance across projects of different sizes.

• Using the wrong EAC formula -- If your cost overruns are systemic (a CPI consistently below 1.0), use EAC = BAC / CPI. If the overrun was a one-time event, use EAC = AC + (BAC - EV). The formula choice dramatically affects your VAC.
• Ignoring VAC trend -- A single VAC calculation is a snapshot. Track VAC across reporting periods. If VAC is getting more negative each month, the problem is worsening. If it is stabilizing, your corrective actions may be working.
• Confusing VAC with CV -- CV = EV - AC measures current period variance. VAC = BAC - EAC measures projected total variance at the end. They use different inputs and answer different questions.
• Not updating EAC regularly -- VAC is only as good as the EAC behind it. Stale EAC figures produce misleading VAC numbers. Recalculate EAC at every reporting period.
• Reporting VAC without action plans -- A negative VAC without a recovery strategy is just bad news. Always pair variance reporting with concrete corrective actions and timeline commitments.
• Forgetting management reserve -- If VAC is negative but within the management reserve, the project may still be financially covered. Always consider total funding available, not just the cost baseline.

VAC questions on the PMP exam are typically combined with EAC calculation questions. You will often be given BAC and some combination of EV, AC, and CPI, then asked to calculate EAC first and VAC second. Know the formula VAC = BAC - EAC and remember the sign convention: positive is under budget, negative is over budget. The exam may also test VAC as a percentage, so be comfortable with VAC% = VAC / BAC x 100.

The exam loves to test your understanding of the relationship between CV, CPI, EAC, and VAC. Here is the chain: CV tells you the current cost variance; CPI tells you the current cost efficiency; EAC uses CPI (or other inputs) to forecast the total cost; VAC uses EAC to predict the final budget variance. Each metric builds on the previous one. In the PMBOK Guide, all of these appear in the Control Costs process of Project Cost Management. Be prepared for situational questions where you must recommend a specific corrective action based on a negative VAC -- common answers include scope reduction, resource optimization, schedule adjustment, or requesting additional funding through change control.