AC (Actual Cost)
Actual Cost (AC) is the money actually spent by a given date — real spend plus effort converted to cost, regardless of what got completed.
How it is counted
Accumulate the real cost of work performed over time: labor, subcontracts, equipment, with internal staff usually converted as hours times a rate. If $48k has gone out by week 5 of a $100k project, AC at that date is $48k. AC is an accounting number — the least theoretical of the three values — but slow aggregation cycles (monthly close, say) lag the whole EVM picture. The scope of aggregation needs settling up front too: if what counts as project cost (overhead in or out) shifts midway, the CPI trend tracks accounting rules instead of performance.
Why it matters
AC only becomes meaningful next to EV. Dividing EV by AC gives the cost performance index (CPI), answering "are we getting value for what we spend?" In the example, $40k of completed value against $48k of spend puts CPI at 0.83. AC alone supports no judgment at all: "we have spent 48% of the budget" is neither good news nor bad. Which is why the basic layout of an EVM report puts PV, EV, and AC side by side in one table.
Common misconceptions
Reading budget health by comparing AC to PV is the classic error. "Spending less than planned" might be thrift — or it might mean the work simply has not progressed. Spend compares against completed value (EV), not against the plan. One more: in organizations where much cost never lands in AC — unpaid overtime, hours borrowed from other departments — CPI looks better than reality. Worth remembering when the number seems too good.
wbsgantt's simplified EVM centers on the schedule axis (SPI) and takes no AC input; the cost axis is on the roadmap.