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Difference between actual cost and planned cost

Please explain all the differences between an actual cost and a planned cost. Also, can we derive one from the other (for example, if we have the actual cost, can we get the planned cost if we apply a certain formula)?

When is the planned cost of a project equal to the actual cost?
asked 8 years ago by anonymous

1 Answer

The planned cost is what you budgeted for an expense.  So if I budget $5,000 for painting, that is my planned cost.  If I actually spend $4,500, I have a $500 cost variance. Mathematically it is impossible to derive the exact planned cost unless I know both the actual cost AND the cost variance.  If I know only the actual cost, I can use curve fitting techniques and show the planned costs and cost variance possiblities.
answered 8 years ago by sdcapmp (45,840 points)

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