Budgeted cost of work performed
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Budgeted cost of work performed (BCWP), or "earned value" (EV), in project management is the budgeted cost of work that has actually been performed in carrying out a scheduled task during a specific time period. NASA's definition of the BCWP is the sum of the budgets for completed work packages and completed portions of open work packages, plus the applicable portion of the budgets for level of effort and apportioned effort. BCWP is an Earned value management term and it is different from:
- Budgeted cost of work scheduled (BCWS) : the approved budget that has been allocated to complete a scheduled task during a specific time period.
- Actual Cost of Work Performed (ACWP) : the actual cost that has been spent, rather than the budgeted cost.
As example of the difference assume that a schedule contains:
- a task "Test hardware" that is budgeted to cost $1000 to perform, and
- is expected to begin at the start of January 1 and
- complete at the end of January 10.
In this case Budgeted cost of work scheduled (BCWS) is $1000 and it is assumed that it would be spent in the period from January 1 to January 10.
At the end of January 5, the work is scheduled to be 50% complete (5 days of the scheduled 10 days). So, at the end of January 5,
- the BCWS is $1000 (the budgeted cost) times 50% (the scheduled completion percentage), or $500.
Suppose that by the end of January 5, the work is actually only 30% complete. In this case,
- the BCWP would be $1000 (budgeted cost) times 30% (the actual completion percentage), or $300.
Also, suppose that to reach the 30% complete level at the end of January 5, $250 was actually spent.
- Then, the ACWP would be $250.
- Project Management Institute (1998) A Guide to the Project Management Body of Knowledge - Third Edition 2004. ISBN 1-930699-45-X
- EVM Glossary
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