EAC Formulas for the PMP Exam: When to Use Each

The Four EAC Formulas: Choosing the Right One on Exam Day

Estimate at Completion is one of the most frequently tested forecasting concepts on the PMP exam, and what makes it challenging is not the math — it is knowing which formula to apply. PMI tests four distinct EAC formulas, each designed for a specific project scenario. The exam question stem will contain clues pointing to one formula. Miss the clue, pick the wrong formula, and your calculation is correct but your answer is wrong.

This article teaches you to read those clues and match them to the right EAC approach every time.

What EAC Represents

EAC answers one question: "Based on what we know right now, what will this project cost when it is finished?" It replaces the original Budget at Completion (BAC) as the working cost forecast once performance data is available. Every EAC formula has the same structure: money already spent plus an estimate of money still needed.

Formula 1: EAC = BAC / CPI

When to Use It

Apply this formula when the question states or implies that current cost performance will continue for the remainder of the project. Keywords include "the trend is expected to continue," "past performance is indicative of future performance," or "CPI is expected to remain stable."

Why It Works

If you have been earning 85 cents of value per dollar (CPI = 0.85) and that rate continues, dividing the total planned value by that efficiency gives you the projected total cost. It is the most commonly tested EAC formula.

Formula 2: EAC = AC + (BAC − EV)

When to Use It

Use this when the question says current variances are atypical or one-time events. The implication is that the issues causing overruns are resolved and future work will proceed at the originally planned rate.

Why It Works

BAC − EV is the remaining planned work valued at the original budget rate. Adding it to AC (money already spent) assumes the remaining work costs exactly what was planned. The past overrun is "sunk cost" baked into AC, but future work returns to plan.

Formula 3: EAC = AC + Bottom-Up ETC

When to Use It

This formula applies when the original estimate is fundamentally flawed or when a new estimate for remaining work has been prepared. Keywords: "the team has re-estimated remaining work," "a new bottom-up estimate," or "the original estimates were inaccurate."

Why It Works

Rather than using any mathematical projection from past data, the project team builds a fresh estimate for all remaining work packages. This is the most accurate but also the most labor-intensive EAC method.

Formula 4: EAC = AC + (BAC − EV) / (CPI × SPI)

When to Use It

Apply this when both cost and schedule performance will influence remaining costs. If the project is behind schedule and the team must work overtime (cost impact from schedule pressure), this formula captures both effects.

Why It Works

Multiplying CPI by SPI creates a composite efficiency factor. When both indexes are below 1.0, the denominator shrinks, producing a larger (more pessimistic) EAC — which reflects the compounding effect of being both over budget and behind schedule simultaneously.

Decision Framework for PMP Questions

Use this mental checklist when you see an EAC question:

1. Does the question mention current performance continuing? → BAC / CPI
2. Does the question mention variances are atypical or one-time? → AC + (BAC − EV)
3. Does the question mention a new or revised estimate? → AC + Bottom-Up ETC
4. Does the question mention schedule impacting cost? → AC + (BAC − EV) / (CPI × SPI)

Worked Comparison

BAC = $500,000, EV = $200,000, AC = $250,000, PV = $220,000

CPI = $200,000 / $250,000 = 0.80. SPI = $200,000 / $220,000 = 0.909.

• Formula 1: $500,000 / 0.80 = $625,000
• Formula 2: $250,000 + ($500,000 − $200,000) = $550,000
• Formula 4: $250,000 + $300,000 / (0.80 × 0.909) = $250,000 + $412,654 = $662,654

Notice how each formula produces a different forecast. The exam tests whether you can justify your choice, not just compute the math.

Key Takeaways for Exam Day

• Read the question stem carefully for clue words about future performance expectations.
• BAC / CPI is the default when no specific scenario is described.
• If two formulas seem applicable, the question stem always favors one — re-read for the deciding detail.

Drill all four EAC formulas with realistic PMP exam questions on our topics page, or download our EVM cheat sheet for a one-page formula reference you can memorize.