The last column of the Project Register shows the Calculated Total.
The Calculated Total is a project cost performance indicator that highlights the cost variance between the physical work completed and the total actual cost incurred in completing this work at a set milestone, i.e. invoice date.
A Calculated Total that exceeds the quoted value indicates production inefficiencies,
poor execution and potential cost overrun, while a Calculated Total of less than the quoted value points towards project work being performed at less than forecasted cost and an efficient productivity rate.
The Project's Calculated Total is based on the formulae: Calculated Total = ((x / (y / 100)) / 100) * 100
x = Total Amount Invoiced and y = Percent Completed (Integer >0 and <= 100)
The formulae can be further reduced to: Calculated Total = x / (y / 100) = x * 100 / y
The calculation occurs when the payment milestone has been reached and the invoice has been issued. At the point of reaching the milestone the budget that has been assigned to the milestone, i.e. the budgeted cost of work performed has been earned.
This is also referred to as Earned Value. At the payment milestone the project’s actual work completed in percent (y) is also entered.
The formula is part of the project cost performance management and cost control. It is an indicator analysing the variance or cost deviation between the consumption of project funds (i.e. amounts invoiced) to the physical work accomplished (i.e. % completed) for such expenditures.
The 'Calculated Total' equals the budgeted cost, i.e. total invoiced value at the point in time of physical work completed as entered by the percent completed.
The following example shows the calculated total after each invoice was issued. The initial quoted value of the project is $1000.
The Example 1 highlights that during the entire project and for each payment milestone the project was on track and everything going according to schedule.
At each milestone the actual cost of work performed is equal to the actual earned value as indicated by the entered value of '% Completed'.
The quoted value of the project ($1000) = Calculated Total = Project budget or Budget at Completion = Funds authorized.
| A |
B |
C |
D |
E |
F |
G |
H |
| Invoice # |
Invoice Amount |
Total Invoiced |
% Completed |
Completed Work |
Cost Variance |
Cost Performance Index |
Calculated Total |
| 1 |
$100 |
$100 |
10 |
$100 |
$0 |
1.00 |
$1,000 |
| 2 |
$400 |
$500 |
50 |
$500 |
$0 |
1.00 |
$1,000 |
| 3 |
$300 |
$800 |
80 |
$800 |
$0 |
1.00 |
$1,000 |
| 4 |
$200 |
$1,000 |
100 |
$1,000 |
$0 |
1.00 |
$1,000 |
Example 1 - Interpretation
Show
Interpretation of the above at each payment milestone (where supplier issues invoice to customer according to an agreed upon payment schedule):
| Invoice # |
|
Interpretation |
| 1 |
|
project is cost efficient, perfect cost performance, ideal planning situation |
| 2 |
|
project is cost efficient, perfect cost performance, ideal planning situation |
| 3 |
|
project is cost efficient, perfect cost performance, ideal planning situation |
| 4 |
|
project is cost efficient, perfect cost performance, ideal planning situation |
Definition of each column
Show
| Column |
|
Definition |
| A |
|
Invoice #1-4 ~= point in time ~= status date |
| B |
|
Invoice Amount = the project consumed funds equal to the (total) actual cost (AC) incurred in accomplishing the work performed (ACWP) at the status date (including profit component - assumption!) |
| C |
|
Total Invoiced = accumulated actual cost = Sum(AC) |
| D |
|
% Completed = percentage completion of the project work = Earned Value (EV) |
| E |
|
Completed Work = Earned Value [$] = the value of the work performed expressed in terms of the approved budget assigned to that work, i.e. against quoted value = Budgeted Cost of Work Performed (BCWP) |
| F |
|
Cost Variance (CV) compares deviations from the budget = BCWP - ACWP; CV measures the efficiency of the project performance |
| G |
|
Cost Performance Index (CPI) = EV / AC = BCWP / ACWP |
| H |
|
Calculated Total = Quoted Value = Budget at Completion (BAC) ==> If the cost performance that must be achieved on the remaining work is to meet the quoted value, then there is neither a cost overrun (CPI<1.0) nor underrun (CPI>1.0).
This is measured by the Cost Performance Index (CPI). CPI = EV/AC. |
The following example shows the calculated total after each invoice was issued. The initial quoted value of the project is $1000.
Value of the work completed compared to the actual cost or progress made on the project indicates a cost underrun. OR, physical progress is being accomplished at less than forecasted cost - in fact an outlay on behalf of the supplier but in project terms favourable.
Note: as the formulae looks at costs only (via CPI) and not at schedule performance we cannot really infer as to whether the project is on time! The CPI measures the efficiency by which the physical progress was accomplished compared to the plan or cost baseline.
| A |
B |
C |
D |
H |
| Invoice # |
Invoice Amount |
Total Invoiced |
% Completed |
Calculated Total |
| 1 |
$100 |
$100 |
15 |
$667 |
| 2 |
$400 |
$500 |
65 |
$769 |
| 3 |
$300 |
$800 |
95 |
$842 |
| 4 |
$200 |
$1,000 |
100 |
$1,000 |
Example 2 - Interpretation
Show
Interpretation of the above at each payment milestone (where supplier issues invoice to customer according to an agreed upon payment schedule):
| Invoice # |
|
Interpretation |
| 1 |
|
CPI >1.0 = cost underrun, earned value higher than invoiced, outlay but good productivity rate |
| 2 |
|
CPI >1.0 = cost underrun, earned value higher than invoiced, outlay but good productivity rate |
| 3 |
|
CPI >1.0 = cost underrun, earned value higher than invoiced, outlay but good productivity rate |
| 4 |
|
project is cost efficient, perfect cost performance, ideal planning situation |
In the following example the percent completed at each stage is smaller then what is invoiced. The initial quoted value of the project is $1000.
Physical progress on the project is being accomplished at a greater cost than forecasted (and already invoiced). This is unfavourable and emphasis should be placed upon improving the productivity by which work was being performed.
| A |
B |
C |
D |
H |
| Invoice # |
Invoice Amount |
Total Invoiced |
% Completed |
Calculated Total |
| 1 |
$100 |
$100 |
1 |
$10,000 |
| 2 |
$400 |
$500 |
5 |
$10,000 |
| 3 |
$300 |
$800 |
8 |
$10,000 |
| 4 |
$200 |
$1,000 |
100 |
$1,000 |
Example 3 - Interpretation
Show
Interpretation of the above at each payment milestone (where supplier issues invoice to customer according to an agreed upon payment schedule):
| Invoice # |
|
Interpretation |
| 1 |
|
CPI <1.0 = cost overrun, earned value less than invoiced, inefficient, poor execution, emphasis should be place upon the productivity rate |
| 2 |
|
CPI <1.0 = cost overrun, earned value less than invoiced, inefficient, poor execution, emphasis should be place upon the productivity rate |
| 3 |
|
CPI <1.0 = cost overrun, earned value less than invoiced, inefficient, poor execution, emphasis should be place upon the productivity rate |
| 4 |
|
project is cost efficient, perfect cost performance, ideal planning situation |
In the following example an invoice for an initial deposit of 10% was issued. The initial quoted value of the project is $1000 and a variation of $500 was approved and invoiced after the third invoice.
| A |
B |
C |
D |
H |
| Invoice # |
Invoice Amount |
Total Invoiced |
% Completed |
Calculated Total |
| 1 (deposit) |
$100 |
$100 |
1 |
$10,000 |
| 2 |
$400 |
$500 |
35 |
$1,429 |
| 3 |
$300 |
$800 |
65 |
$1,231 |
| 4 (variation) |
$500 |
$1,300 |
85 |
$1,529 |
| 5 |
$200 |
$1,500 |
100 |
$1,500 |
Example 4 - Interpretation
Show
Interpretation of the above at each payment milestone (where supplier issues invoice to customer according to an agreed upon payment schedule):
| Invoice # |
|
Interpretation |
| 1 |
|
deposit, no indication of project efficiency |
| 2 |
|
CPI <1.0 = cost overrun, earned value less than invoiced, inefficient, poor execution, emphasis should be place upon the productivity rate |
| 3 |
|
CPI <1.0 = cost overrun, earned value less than invoiced, inefficient, poor execution, emphasis should be place upon the productivity rate |
| 4 |
|
CPI <1.0 = cost overrun, earned value less than invoiced, inefficient, poor execution, emphasis should be place upon the productivity rate |
| 5 |
|
project is cost efficient, perfect cost performance, ideal planning situation |