In the following tables, you can see how the values of an estimate are distributed when the four different cost to complete methods are applied.
The first two tables contain the estimate assumptions and the last four tables are examples of estimates created in September where each example is created with one of the cost to complete methods.
Estimate
assumptions
Estimate posted in August
|
Cost line |
Transaction type |
Forecasting |
Actual |
Cost to complete |
Total |
|---|---|---|---|---|---|
|
Development |
Hour |
Yes |
70,000 |
30,000 |
100,000 |
|
Test |
Hour |
No |
60,000 |
20,000 |
80,000 |
|
Subcontractor |
Expense |
Yes |
25,000 |
5,000 |
30,000 |
|
Travel |
Expense |
No |
10,000 |
2,000 |
12,000 |
|
Hardware |
Item |
No |
80,000 |
0 |
80,000 |
|
Software |
Item |
Yes |
35,000 |
7,000 |
42,000 |
|
280,000 |
64,000 |
344,000 |
Consumed cost in September
|
Cost line |
Transaction type |
Actual transactions in September |
Forecast transactions in forecast model |
|---|---|---|---|
|
Development |
Hour |
20,000 |
12,000 |
|
Test |
Hour |
16,000 |
5,000 |
|
Subcontractor |
Expense |
3,000 |
3,000 |
|
Travel |
Expense |
1,000 |
2,000 |
|
Hardware |
Item |
0 |
0 |
|
Software |
Item |
8,000 |
0 |
|
48,000 |
22,000 |
Cost to
complete methods
The Total method:
|
Cost line |
Transaction type |
Forecasting |
Actual |
Cost to complete |
Total |
|---|---|---|---|---|---|
|
Development |
Hour |
Yes |
90,000 |
10,000 |
100,000 |
|
Test |
Hour |
No |
76,000 |
4,000 |
80,000 |
|
Subcontractor |
Expense |
Yes |
28,000 |
2,000 |
30,000 |
|
Travel |
Expense |
No |
11,000 |
1,000 |
12,000 |
|
Hardware |
Item |
No |
80,000 |
0 |
80,000 |
|
Software |
Item |
Yes |
43,000 |
-1,000 |
42,000 |
|
328,000 |
16,000 |
344,000 |
The Forecasting method
|
Cost line |
Transaction type |
Forecasting |
Actual |
Cost to complete |
Total |
|---|---|---|---|---|---|
|
Development |
Hour |
Yes |
90,000 |
12,000 |
102,000 |
|
Test |
Hour |
No |
76,000 |
5,000 |
81,000 |
|
Subcontractor |
Expense |
Yes |
28,000 |
3,000 |
31,000 |
|
Travel |
Expense |
No |
11,000 |
2,000 |
13,000 |
|
Hardware |
Item |
No |
80,000 |
0 |
80,000 |
|
Software |
Item |
Yes |
43,000 |
0 |
43,000 |
|
328,000 |
64,000 |
350,000 |
The As previous estimate method
|
Cost line |
Transaction type |
Forecasting |
Actual |
Cost to complete |
Total |
|---|---|---|---|---|---|
|
Development |
Hour |
Yes |
90,000 |
12,000 |
102,000 |
|
Test |
Hour |
No |
76,000 |
4,000 |
80,000 |
|
Subcontractor |
Expense |
Yes |
28,000 |
3,000 |
31,000 |
|
Travel |
Expense |
No |
11,000 |
1,000 |
12,000 |
|
Hardware |
Item |
No |
80,000 |
0 |
80,000 |
|
Software |
Item |
Yes |
43,000 |
0 |
43,000 |
|
328,000 |
20,000 |
348,000 |
The Set cost to complete to zero method
|
Cost line |
Transaction type |
Forecasting |
Actual |
Cost to complete |
Total |
|---|---|---|---|---|---|
|
Development |
Hour |
Yes |
90,000 |
0 |
90,000 |
|
Test |
Hour |
No |
76,000 |
0 |
76,000 |
|
Subcontractor |
Expense |
Yes |
28,000 |
0 |
28,000 |
|
Travel |
Expense |
No |
11,000 |
0 |
11,000 |
|
Hardware |
Item |
No |
80,000 |
0 |
80,000 |
|
Software |
Item |
Yes |
43,000 |
0 |
43,000 |
|
328,000 |
0 |
328,000 |
