VAC (Variance at Completion)

How it is computed

VAC = BAC − EAC: the budget at completion minus the estimate at completion. If the total budget is $1M and the performance-based forecast of final cost (EAC) is $1.25M, VAC is −$250k — on the current trajectory the project overruns its budget by $250k. Zero means finishing on budget; positive means finishing under. Where SV and CV are variances so far, VAC is the forecast variance at the end.

Why it matters

Decisions need the final variance more than the current one. "CV is −$8k" is hard to judge; "VAC is −$250k" puts additional funding or scope adjustment on the table now, while options still exist. VAC inherits every assumption of the EAC it is derived from, so a credible report names which EAC produced it — CPI-based, bottom-up re-estimate, or another formula.

Common misconceptions

A negative VAC is sometimes shelved because "there is still budget left." Having remaining budget (BAC − AC) and finishing within budget are different claims — VAC warns about the second regardless of the first. And improving VAC by raising BAC does not improve the outlook; it moves the yardstick. A BAC change should be the outcome of change control and a re-baseline, with the history preserved.