HKSM

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."?

1. Actual Cost (AC)
2. Budget at Completion (BAC)
3. Estimate at Completion (EAC)
4. 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.