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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.

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Budget at Completion practice test

Budget at Completion (BAC) is the sum of all budgets established for the project; it signifies how much the project is expected to cost upon completion. In Agile EVM, BAC can be set using the cost per story point (using the estimates provided in story points) and the number of features/stories to complete. It allows the Agile team to determine whether the project is on budget or has cost overruns (Positive or negative Variance).

Time: 5 minutes   Questions: 5

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PMI Agile Certified Practitioner Preparation Package (2024)

  • 4442 Superior-grade PMI Agile Certified Practitioner practice questions.
  • Accelerated Mastery: Deep dive into critical topics to fast-track your mastery.
  • Unlock Effortless PMI-ACP preparation: 5 full exams.
  • 100% Satisfaction Guaranteed: Full refund with no questions if unsatisfied.
  • Bonus: If you upgrade now you get upgraded access to all courses
  • Risk-Free Decision: Start with a 7-day free trial - get premium features at no cost!