Cost and Budget Formulas
Planned Labor Cost – a prediction of how much labor cost the project might need.
Planned Labor Cost = Estimated Hours x Internal Hourly Rate
Planned Expenses – a prediction of non-labor related costs the project might need.
Planned Project Cost – the expected total cost of the project at the very beginning of the project.
Actual Labor Cost – the total cost of labor spent on the project to date.
Actual Expenses – how much has been spent on project expenses to date.
Actual Project Cost – the real-time summary of the project’s actual labor costs and expenses once the project has started.
Estimate at Completion (EAC) Labor Cost – the estimated total labor cost at the end of the project.
ETC Expenses – remaining expenses needed to complete the project.
ETC Project Cost – the real-time summary of the remaining estimated labor cost and planned expenses – what is left to complete the project.
Estimate to Complete (ETC) Labor Cost – remaining labor cost needed to complete the project.
EAC Expenses – estimated total expenses at the end of the project.
EAC Project Cost – estimated total cost at the end of the project.
Remaining Budget – the amount left to complete the project.
Total Project Budgeted Cost – a set amount allocated to a project as a cost threshold that the Project Manager needs to remain under.
Billing and Revenue Formulas
Actual Flat Fee Activities – the sum of all flat fees associated with billable activities that have been completed.
Actual Labor Billing – the amount of money matching the performed billable labor.
Actual Billable Expenses – the sum of all actual expenses that are billable to a customer.
EAC Billable Expenses – the sum of all billable expenses at the end of the project.
EAC Billable Expenses = Actual Billable Expenses + ETC Billable Expenses
Actual Profit Margin – real-time profitability of the project represented as a percentage.
Project Margin = Actual Project Profit / Actual Project Revenue * 100%
EAC Profit Margin – estimated profitability at the end of the project represented as a percentage.
EAC Project Margin = EAC Project Profit / EAC Project Revenue * 100%
Billed – total amount already billed to a customer.
Miscellaneous Project Financial Formulas
Work in Progress (WIP) – shows how much work has been completed that has not been billed to the customer yet.
Cost Performance Index (CPI) – shows how well the project is performing relative to the project budget.
CPI = (Progress * Estimated Hours * 100) / Actual Hours
Schedule Performance Index (SPI) – shows how well the project is performing relative to the project schedule.
SPI = (Progress / 100) / (Current Date – Start Date) / (End Date – Start Date)
Utilization Rate – a ratio between the total billable hours spent by each resource to their available hours and is calculated as a percentage.
Utilization Rate = Billable Hours / Total Available Hours * 100%
Realization Rate – a ratio between total billed hours compared to the total available billable hours.
Realization Rate = Total Billed Hours / Total Billable Hours * 100%
Realized Rate – an effective billing rate based on the Realization Rate and your resources’ billing rate.
