What is significant about the difference between Budgeted Cost of Work Performed and Actual Cost of...

What is significant about the difference between Budgeted Cost of Work Performed and Actual Cost of Work Performed (i.e., BCWP - ACWP)? How is it different than Budget vs. Actuals? (4 pts)

Expert Solution

Significance about the difference between the Budgeted cost of work performed and the Actual cost of work performed

Budgeted cost of work performance

Budgeted cost of work performed refers to the budgeted cost of the total work accomplished or completed till date. This term is being precisely used to address the entire project, individual project or a set of work packages. It is normally used in comparison with the Actual cost of work performed (ACWP).

The contractor would first report the Budgeted Cost of Work Performed on all tasks completed by him on a project. He would them compare the same with the Budgeted Cost of Work Scheduled to determine whether the the project is ahead of or behind the schedule where the project is projected to be.If the project is behind the schedule, then BCWP will be less than BCWS.

BCWP is a tool which is being widely used in Earn Value Management and hence it is also called the Earned Value.

Actual cost of Work Performance

Actual cost of work performance refers to the cost incurred and is recorded for the total project within the stipulated period of time. ACWP is being recorded by the contractor in accordance to the generally accepted accounting principles and is simply stated as the actuals.

Difference between BCWP vs ACWP and Budget vs Actuals

A budget refers to the financial plan for a defined period of time while BCWP is the sum of all the budgets put together.

Actual cost refers to the total cost incurred to complete a project It is also known as the Actual cost of work performed.

jeff jeffy answered 3 days ago

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