Question

The project to obtain charitable donations is now 40 days into a planned 50-day project. The project is divided into 3 activities. The first activity is designed to solicit individual donations. It is scheduled to run the first 35 days of the project and to bring in $25,600. Even though we are 40 days into the project, we still see that we have only 92% of this activity complete. The second activity relates to company donations and is scheduled to run for 40 days starting on day 5 and extending through day 45. We estimate that even though we should have (35/40) 88% of this activity complete, it is actually only 52% complete. This part of the project was scheduled to bring in $150,600 in donations. The final activity is for matching funds. This activity is scheduled to run the last 10 days of the project and has not started. It is scheduled to bring in an additional $51,200. So far $177,000 has actually been brought in on the project.

Calculate the schedule variance, schedule performance index, cost variance and cost (actually value in this case) performance index.

What is the:

Schedule variance     $

Schedule performance index

Cost variance $

Cost performance index

Answer 1

Activity 1:

Planned complete = 100% (Since the duration is 35 days)

Budget at completion = BAC = $25,600

Planned Value PV1 = Planned complete * BAC = 100% * 25,600 = $25,600

Actual % complete = 92%

Earned Value EV1 = 92% * 25,600 = $24,320‬

Activity 2:

Planned complete = 88%

Budget at completion = BAC = $150,600

Planned Value PV2 = Planned complete * BAC = 88% * 150,600 = $132,528‬

Actual % complete = 52%

Earned Value EV2 = 52% * 150,600 = $78,312‬

Activity 3:

Planned complete = 0% (Since it is to run in last 10 days i.e. Start after status date of 40th day)

Budget at completion = BAC = $51,200

Planned Value PV3 = Planned complete * BAC = 0% * 51,200 = $0

Actual % complete = 0%

Earned Value EV3 = 0% * 51,200 = $0

Total Actual Cost AC = $177,000

Total PV = PV1 + PV2 + PV3 = 25,600 + 132,528‬ + 0 = $158,128‬

Total EV = EV1 + EV2 + EV3 = 24,320‬ + 78,312‬ + 0 = $102,632‬

Schedule variance = EV - PV = 102,632 - 158,128 = $ (-55,496)

Schedule performance index = EV / PV = 102,632 / 158,128 = 0.65

Cost variance = EV - AC = 102,632 - 177,000 = $ (-74,368‬)

Cost performance index = EV / AC = 102,632 / 177,000 = 0.58

Hence, we get answers as:

Schedule variance = $(-55,496)

Schedule performance index = 0.65

Cost variance = $(-74,368‬)

Cost performance index =  0.58

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