In this problem, the key is to determine the Budgeted Cost of Work Performed (BCWP), which refers to the portion of the budget allocated for the completed work as of a particular point in time. The BCWP is also known as the Earned Value (EV). It is a critical measure in project management, particularly in the Earned Value Management (EVM) system, as it allows for a comparison between the planned progress and the actual progress of the project.
Given:
Baseline budget (Total Planned Budget or BAC): $1,000,000
Project duration: 12 months
Budgeted Cost of Work Scheduled (BCWS) for the first month: $108,000
Actual Cost of Work Performed (ACWP) for the first month: $100,000
Total physical progress: 9%
Steps to determine the BCWP:
Calculate the Planned Value (PV):
This is the value of the work planned to be completed by a specific time.
Here, PV for the first month is $108,000.
Determine the Actual Cost (AC):
The AC is the cost incurred for the actual work performed, which is $100,000 in this case.
Calculate the Earned Value (EV) or BCWP:
BCWP is calculated by multiplying the total physical progress by the Budget at Completion (BAC).
Given that the physical progress is 9%, the BCWP can be computed as:
BCWP=Physical Progress×BAC\text{BCWP} = \text{Physical Progress} \times \text{BAC} BCWP=Physical Progress×BAC BCWP=0.09×1,000,000=$90,000\text{BCWP} = 0.09 \times 1,000,000 = \$90,000BCWP=0.09×1,000,000=$90,000 Conclusion:
The Budgeted Cost of Work Performed (BCWP) for this project at the end of the first month is $90,000, which matches option A. This calculation is critical in project management for determining how much of the budgeted work has been actually completed, enabling accurate performance assessment against the project baseline.