PK0-003 · Question #16
A project was originally budgeted for $500,000. So far, the EV and AC on the project are equal. Two approved change requests have been submitted since the project began. One necessitated a change in t
The correct answer is C. $820,000. The Budget At Completion (BAC) is the total project budget, which is updated by adding the costs of all approved change requests to the original budget.
Question
A project was originally budgeted for $500,000. So far, the EV and AC on the project are equal. Two approved change requests have been submitted since the project began. One necessitated a change in the project that would increase costs by $50,000. The second change request increased costs by $270,000. Which of the following is the new BAC for the project?
Options
- A$500,000
- B$550,000
- C$820,000
- D$920,000
How the community answered
(21 responses)- A10% (2)
- B5% (1)
- C86% (18)
Why each option
The Budget At Completion (BAC) is the total project budget, which is updated by adding the costs of all approved change requests to the original budget.
$500,000 is the original BAC and does not account for the approved cost-increasing change requests.
$550,000 only accounts for the original budget plus the first change request, omitting the second one.
The Budget At Completion (BAC) is the total amount of budget planned to complete all work. When approved change requests increase the scope and budget of the project, the original BAC is updated to reflect these approved changes. The original BAC of $500,000 plus the first change of $50,000 and the second change of $270,000 results in a new BAC of $500,000 + $50,000 + $270,000 = $820,000.
$920,000 is an incorrect calculation; it would be the original BAC plus both changes plus an additional $100,000, which is not indicated in the question.
Concept tested: Earned Value Management - Budget At Completion (BAC) updates
Source: https://www.project-management.com/budget-at-completion/
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