Welcome to Project Management Questions!

You can ask any question on Project Management and you can rest assured that real Project Managers will answer your shortly!

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 7 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 7 years ago by sdcapmp (45,840 points)

Related questions

© 2010 - 2012 Project Management Questions - All Rights Reserved