Guide to Actual Cost (AC) in Earned Value Management

What is Actual Cost (AC)?
The Actual Cost (AC) refers to the costs incurred for work accomplished during a specific time period. This is a critical component of Earned Value Management, a method used for measuring a project's performance and progress.

Why is it Important?
Through understanding and calculating AC, you can monitor, control, and manage costs effectively. Noting the disparities between your budget (or Planned Value) and the AC provides valuable insights on the efficiency of your resource usage.

How does it work?
The Actual Cost is simply the total cost incurred for the performed work. It's obtained from the accounting system and includes direct and indirect costs associated with the accomplished work.

Exam Tips: Answering Questions on Actual Cost (AC)
during an exam, ensure you can:
- Understand the definition and role of AC in project analysis
- Calculate AC based on presented costs
- Compare AC to other parameters such as the Planned Value (PV) and Earned Value (EV) to analyze project performance.
- Interpret the results of AC calculations. If AC is less than EV or PV, the project is under budget. Otherwise, it is over!
Remember to keep your answers concise, accurate, and relevant to the presented question.