Guide: Understanding Budget at Completion in PMI-ACP Agile EVM

The Budget at Completion (BAC) is a key component in the Agile EVM (Earned Value Management) method. It's the total budget allocated for a project or a task at any given point in time.
Why is it important?
The BAC is important because it helps you track actual costs as the project progresses, making it easier to anticipate and rectify any cost overruns. It also enables you to ascertain whether your projects are on track, over-budget, or under-budget.
How does it work?
The BAC is calculated at the inception of a project or task and can be periodically updated as costs change or unforeseen expenses occur. It is essentially the sum of the approved cost estimates for all project activities.
Answering Questions in the exam:
Understanding the BAC is crucial for the PMI-ACP exam because questions relating to cost management are common. You might, for example, need to interpret whether a project is going over budget based on the BAC and other cost variables given in the question.
Exam Tips:
1. Understand the concept and calculation of BAC thoroughly.
2. Practice problems associated with BAC and other cost management indicators.
3. Understand how changes in BAC can impact a project's cost performance index (CPI) and schedule performance index (SPI).
4. If presented with a set of cost variables including BAC, AC (Actual Cost), and PV (Planned Value), remember the formula to calculate the cost performance index (CPI): CPI = EV/AC.
5. Know how to interpret whether a project is over or under budget based on these variables and indicators.