What is Actual Cost in Project Management?

Learn Actual Cost definition in project management with explanation to study “What is Actual Cost”. Study actual cost explanation with project management terms to review project management course for online MBA programs.

Actual Cost Definitions

  1. Actual cost of a project is the fund actually expended on the project.

    Successful Project Management by Jack Gido and James P. Clements

  2. Actual cost (AC) is the realized cost incurred for the work performed on an activity during a specific time period.

    A Guide to the Project Management Body of Knowledge by Project Management Institute

Actual Cost Explanation

It is important to monitor if the actual work performed is according to the plan. In addition, the actual and the estimated/planned costs are also compared for monitoring purpose. Actual cost is basically the cost incurred when actual work is performed on the project. Data is gathered for the actual costs either weekly or monthly. Work breakdown structure divides the project into activities and work packages. Using the work breakdown structure, the actual cost of each work package can be identified and totaled so that the actual cost of each work package can be compared with the cumulative budgeted cost of the respective work package.

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