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Cost Management Formulas (Tips for CAPM)

Chapter 7: Project Cost Management


Last two blog posts of mine covered the topics that are essential to memorize for the exam, and I also talked about ways to memorize those topics. Today’s topic is also something that should be memorized for the exam.


When you take the exam, at least in the US, you get two blank pages to write down anything or to use for any calculations. My tip is to write down the formulas and the process groups matrix before you start the exam. This way, you won’t forget the formulas when you need them during the test, and you can refer the matrix for questions related to the process groups and knowledge areas.

There are several formulas in the book, but the most important ones have to do with Earned Value. There are formulas to calculate the schedule variance (SV), cost variance (CV), schedule performance index (SPI), and cost performance index (CPI). Other than these, there are EAC (estimate at completion) for budgeted rate, EAC for present CPI, and EACH considering SPI and CPI. Here are mnemonic devices to remember the formulas (credit to papercut.pmp.com):

This is used to remember the Earned Value formulas (CV, SV, CPI, SPI).

This is to memorize the EAC for the different scenarios (also credit to papercut.pmp.com).

Using these ways to remember the formulas, and writing them down as soon as you get to the exam hall on the scratch paper they provide you with will definitely help you a lot. Good luck!

Earned Value Memory Aid

The Control Cost process is really important in the exam and by my experience you can find up to 5 questions related just with the EVM. The CAPM exam is not going really deep with the formulas but you should know them and be able to make some calculs. 

Tip: if you are going for the computer based exam you will notice that there is a calculator on the bottom right corner of the page. My advice? Use it all the time! Calculs shouldnt be really complex but when you are under stress even 2+2 can be 5 if you dont pay attention! 

Coming back to the EVM there are 4 basic formulas you should know:





Where AC is the actual cost, EV the earn value, and PV the planned value.

Tip: If you check the formulas once more you will realize something really helpful! They all start with EV the earn value and then is just about thinking if the formula is an index or a variance and what kind of (cost or schedule).

Now you know! Just remember this and for the exam you will be 4 question closer to your certification.

As always thanks for reading. Have a question or something you would like us to explain you? Log in and post it HERE!


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