Estimate-To-Complete, Estimate-At-Completion, etc



  • Avatar
    Peter Mall

    I was a bit confused on this at first but then I studied the figures in ch 10 and how they explain the breakdown. Read the key terms, make flashcards if necessary. You shouldn't fret over the software used, but you should understand the data being shown. There is a big difference between revenue (NSR) earned for a project and the planned cost (raw labor cost) which does not include overhead and profit. Your budget for a given project (labor hours and dollar amounts) should be based on direct labor cost without multipliers (planned labor). As stated for figure 10.12 the planned - EAC = -64,425.10 which is equivalent to -197,141 in revenue (using the stated 3.06 planned multiplier).

  • Avatar
    Daniel Douglas

    I thought I had this figured out, but now I'm not so sure. I had decided that the right way is to always analyze the financial progress in terms / units of "factored labor" - with multipliers applied. We're trying to gauge what we're gaining for what we're spending - so what are we spending on? Just direct labor? No, we're also spending on indirect labor and employee benefits and rent and office equipment and all the other stuff that the labor multipliers are supposed to cover, so it makes sense that all the terms and units in formulas for ETC, EAC, EAC Multiplier, and Effective Multiplier would be expressed as "factored labor", with multipliers applied.


Please sign in to leave a comment.

Powered by Zendesk