In this problem, the key is to determine theBudgeted Cost of Work Performed (BCWP), which refers to the portion of the budget allocated for the completed work as of a particular point in time. The BCWP is also known as theEarned Value (EV). It is a critical measure in project management, particularly in the Earned Value Management (EVM) system, as it allows for a comparison between the planned progress and the actual progress of the project.
Given:
Baseline budget (Total Planned Budget or BAC):$1,000,000
Project duration:12 months
Budgeted Cost of Work Scheduled (BCWS) for the first month:$108,000
Actual Cost of Work Performed (ACWP) for the first month:$100,000
Total physical progress:9%
Steps to determine the BCWP:
Calculate the Planned Value (PV):
This is the value of the work planned to be completed by a specific time.
Here, PV for the first month is $108,000.
Determine the Actual Cost (AC):
The AC is the cost incurred for the actual work performed, which is $100,000 in this case.
Calculate the Earned Value (EV) or BCWP:
BCWP is calculated by multiplying the total physical progress by the Budget at Completion (BAC).
Given that the physical progress is 9%, the BCWP can be computed as:
BCWP=Physical Progress×BAC\text{BCWP} = \text{Physical Progress} \times \text{BAC} BCWP=Physical Progress×BAC BCWP=0.09×1,000,000=$90,000\text{BCWP} = 0.09 \times 1,000,000 = \$90,000BCWP=0.09×1,000,000=$90,000
Conclusion:
The Budgeted Cost of Work Performed (BCWP) for this project at the end of the first month is$90,000, which matches option A. This calculation is critical in project management for determininghow much of the budgeted work has been actually completed, enabling accurate performance assessment against the project baseline.
