What does ACWP stand for in earned value management?

What does ACWP stand for in earned value management?

• A. Actual Cost of Work Plan.
• B. Actual Cost of Work Productivity.
• C. Actual Cost of Work Performed.
• D. Actual Cost of Work Processed.

Answer: (C)

In earned value management, the Actual Cost of Work Performed is the money actually spent on the work that has been completed to date. It captures real expenditures, not what was planned or what the work is worth in budget terms. This figure is used with the Earned Value (the budgeted cost of work actually completed) to gauge cost performance, commonly via the Cost Performance Index (CPI = EV / ACWP). If ACWP is higher than EV, CPI drops below 1, signaling cost overruns; if ACWP is lower, CPI is above 1, indicating cost efficiency. For example, if the portion of work has a budgeted cost of $60,000 (Earned Value = $60,000) but you actually spent $70,000 (Actual Cost = $70,000), CPI = 60,000 / 70,000 ≈ 0.86, showing less efficient spending. The other options don’t reflect the standard terminology used in earned value management these terms refer to actual costs of work performed, not plan, productivity, or processed costs.

In earned value management, the Actual Cost of Work Performed is the money actually spent on the work that has been completed to date. It captures real expenditures, not what was planned or what the work is worth in budget terms. This figure is used with the Earned Value (the budgeted cost of work actually completed) to gauge cost performance, commonly via the Cost Performance Index (CPI = EV / ACWP). If ACWP is higher than EV, CPI drops below 1, signaling cost overruns; if ACWP is lower, CPI is above 1, indicating cost efficiency.

For example, if the portion of work has a budgeted cost of $60,000 (Earned Value = $60,000) but you actually spent $70,000 (Actual Cost = $70,000), CPI = 60,000 / 70,000 ≈ 0.86, showing less efficient spending. The other options don’t reflect the standard terminology used in earned value management these terms refer to actual costs of work performed, not plan, productivity, or processed costs.