Definition
Variance at completion (VAC) is a project management metric that forecasts the financial outcome of a project upon its conclusion. It is calculated by subtracting the projected cost at completion from the budgeted cost at completion. This metric helps stakeholders understand if a project is expected to finish over or under budget. VAC is determined by adding the cost variance (CV) to the earned value management (EVM) cost performance index (CPI) and then multiplying by the actual cost (AC) of work performed. Understanding VAC is crucial for financial control and informed decision-making regarding project profitability. For instance, a negative VAC indicates the project is predicted to exceed its budget, while a positive VAC suggests it will come in under budget. It differs from cost variance (CV), which measures budget performance only up to the current point in time. Variance at completion is a key concept tested on PMP, CAPM, and PMI-ACP examinations.