Question

Your project to obtain charitable donations is now 45 days into a planned 55-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 40 days of the project and to bring in $24,900. Even though we are 45 days into the project, we still see that we have only 91% of this activity complete. The second activity relates to company donations and is scheduled to run for 45 days starting on day 5 and extending through day 50. We estimate that even though we should have (40/45) 89% of this activity complete, it is actually only 60% complete. This part of the project was scheduled to bring in $149,900 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 $49,800. So far $175,800 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. (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your dollar amounts to the nearest whole number. Round your "performance index" values to 3 decimal places.)

rev: 08_07_2014_QC_522

Schedule variance	$__________
Schedule performance index	___________
Cost variance	$__________
Cost performance index	___________

Answer 1

Let the three activities be names as 1, 2 and 3 respectively.

First, lets compute budgeted revenue of the project till 45th day. To do that, we need to compute budgeted revenue of each activity.

Budgeted revenue of work completed for Activity 1= Budgeted revenue X Planned completion till date

= 24900 X 100% = $24900

Budgeted revenue of work completed for Activity 2= Budgeted revenue X Planned completion till date

= 149900 X 89% = $133411

Budgeted recenue of work completed for Activity 3= Budgeted revenue X Planned completion till date

=49800 X 0% = 0

Thus, budgeted revenue of the project = Budgeted rev. of Activity 1 + Budgeted rev. of Activity 2 + Budgeted rev. of Activity 3

= 24900 + 133411 + 0= $158311

Budgeted revenue of work performed till 45th day,

Budgeted revenue of work performed for Activity 1= Budgeted revenue X actual completion date

= 25000 X 91% = $22750

Budgeted revenue of work performed for Activity 2= Budgeted revenue X actual completion date

= 149900 X 60% = $89940

Budgeted revenue for work performed for Activity 3= Budgeted revenue X actual completion date

= 49800 X 60% = $89940

Thus, budgeted revenue of work performed project = Budgeted rev. of Activity 1 + Budgeted rev. of  Activity 2 + Budgeted rev. of  Activity 3

= 22750 + 89940 + 0= $112690

Schedule variance = Budgeted revenue of work performed - budgeted revenue of work scheduled = 112690 - 158311 = -$45621

This indicates project is behind schedule.

Schedule performance index = Budgeted revenue of work performed/ budgeted revenue of work scheduled = 112690/158311= 0.712

A scheduled performance index of less than 1 also indicates project is behind schedule.

Cost variance = Budgeted revenue of work performed - Actual revenue = 112690 -175800 = -$63110

Cost performance index = Budgeted revenue of work performed / Actual revenue = 112690/ 175800 = 0.641

A cost performance index of less than 1 also indicates project is performing better than planned performance in terms of revenue