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"ACTUAL COST" versus "REAL COST" RRS feed

  • Question

  • Hello,

    I look for a solution to a problem (using MS Project 2013). I see some difference between the "ACTUAL COST" and the "REAL COST". Consequently EVM is incorrect because the Actual cost do not show the reality.

    The "REAL COST" is correct and show all cost of the projet. However, the ACTUAL COST field which should in my opinion, always match the "real cost" (incidentally, the difference escapes me), is much smaller than the "real cost" and appears to be leveling ....

    So my questions are : Why the Actual cost is not the same as the real cost ? How make the actual cost the same as the real actual cost (that is, all the cost already incurred) ?

    Monday, May 18, 2015 9:33 PM

Answers

All replies

  • Suppose you have a task which was planned to take 10 days, say "lay 10000 bricks" and the cost is the result of the bricklayer at $50/hour x 80 hours = $4000, plus 10000 bricks at $10000, ie $1/brick, so total cost $14000 or $1400/day.

    Then, after 6 days, you record progress by "mark on track", then the actual cost will be calculated as 6 x $1400 = $8400.

    However, it may be that the bricklayer "really" cost $60/hour and the bricks really cost $1.20 each.
    So the "real" actual cost was (48 x 60) + (6000 x 1.2) = $2880 + $7200 = $10080.

    In file, options, schedule you will find an option "actual costs are always calculated by project". if that box is checked, then the calculation is done by MSP and you cannot edit it in the actual cost field. But if you un-check that box you can edit the field and input $10080.

    Monday, May 18, 2015 11:29 PM
  • Think for the answers. I think i use the wrong word. My problem is difference about ACWP and Actual Cost. There is always a difference (ACWP is always smaller than Actual cost) and the only way i found to make them the same is to change the current/status date:when i put them in the futur, then ACWP and Actual Cost became identical.... Where is my error ?

    "The ACWP (actual cost of work performed) fields show costs incurred for work already done on a task, up to the project status date or today's date."

    "The Actual Cost fields show costs incurred for work already performed by resources  on their tasks along with any other recorded costs associated with the task"

    AS the EVM is based on ACWP, my EVM is wrong.

    Tuesday, May 19, 2015 9:21 PM
  • Hi Sébastien,

    If you allow me to jump in, here are some clarifications.

    The ACWP and the actual cost might be different. As you correctly pointed out, the ACWP shows the actual cost incurred on a task (how much did we actually spend till Status Date). This is a cumulative sum of the actual cost incurred on a task as of status date.

    Thus you can see that the ACWP is much dépendent on the status date. Based on your status date, the ACWP might not consider actuals in the past, meaning that the AWCP will be lower than the actual cost.

    The status date is a key parameter for all EVM calculation, thus your EVM is not wrong, it is just calculated with the right formulas based on the parameter and data entered by you in the project plan.

    If you are willing to provide some explicit example, we will try to help you.

    Here is an excellent blog about EVM calculations/examples in MS Project.

    http://www.epmcentral.com/articles/evoverview.php


    Hope this helps,


    Guillaume Rouyre, MBA, MVP, P-Seller |


    Wednesday, May 20, 2015 7:40 AM
    Moderator
  • Hi Guillaume,

    thank for your help. I want to send you my .mpp in order to expose my issue. Is there a way to send you this file (i can only attach image to message...)

    Sebastien rolle

    PMP

    Thursday, May 21, 2015 1:54 AM
  • Sebastien,

    if you like, you can send the mpp to me trevorATperfectproject.com.au

    Thursday, May 21, 2015 7:26 AM