BCWP vs. ACWP
First the definitions:
- BCWS = Planned Value (also called PV). It means: What is this thing worth to us? It is often used as a synonym for "planned cost".
- BCWP = Earned Value ( also called EV). It means: What have we received for our money?
- ACWP = Actual Cost (also called AC). It means: How much did we spend to get what we received?
Now the example:
Let's say you contract with a painter to paint your house. He estimates that he can paint all four walls at a rate of one wall per day, over a total of four days. You agree to pay him $100 at the end of each day, or a total of $400 for the entire project.
At the end of the first day, one wall is completed.
- Your BCWS = $100 since you planned to have one wall complete at the end of day 1.
- Your BCWP = $100 since the wall was actually completed.
- You pay the painter the agreed $100, so your actual cost, or ACWP is $100.
- Schedule Variance (SV) = Earned Value - Planned Value = BCWP - BCWS = $100 - $100 = $0. Your project is right on schedule.
- Cost Variance (CV) = Earned Value - Actual Cost = BCWP - ACWP = $100 - $100 = $0. Your project is on budget.