PMP Formula of the Week: What is BAC?

The correct answer is B.

BAC, or Budget at Completion, determines the sum of the original budget and approved changes.

Determining a funding limitation for the project, answer A, is incorrect because project funding limitation is defined by senior management, and the BAC is a specific value used in earned value computations.

Determining EAC (Estimate at Completion), answer C, is incorrect because for BAC to equal EAC at the end of the project all changes must be approved, execution must include absolutely no scope creep or gold plating and maintain an average productivity rate of 100 percent throughout the project.

Defining the acceptable range of budget variability, answer D, is incorrect because BAC represents the approved budget at completion and is used in earned value forecast calculations. The range of acceptable cost performance variation is established within the project management plan.