Job Costing - Calculation of % Complete and Projected Final

The system calculates percent complete and projected final cost at completion as:

Percent Complete	=	Costs ÷ Project Final Cost
Projected Final Cost	=	Costs ÷ % Complete
Cost to Complete	=	Project Final Cost – Costs

Example 1: Prior to the Posting of Costs

Prior to the posting of costs, the system will assume the projected final amount to be equal to the budget; meaning that the cost to complete this cost code/category (i.e. $1000) will be equal to what was budgeted to complete this cost code/category (i.e. $1000).

Example 2: When Costs are Posted to the Job

Once a cost has been posted against the cost code/category, the system takes the cost accumulated to date, and divides by the budget amount to reach the % complete. Here, the system assumes that based on the accumulation of $100 of costs against a $1000 budget, we have completed 10% of the work.

Calculation of % Complete & Projected Final – Manually Updated

The system calculation of percent complete and projected final is based on the assumption that the work on a job is being completed at the same rate at which the costs are accumulating. This may not always be the case, and this assumption may be misleading when monitoring estimated costs at completion. For this reason, it may be useful to override the system cost to complete or projected final cost.

Example 1: Prior to a Manual Change

This example shows the way in which the system calculates the percent complete and projected final numbers when the assumption is that the work is being completed at the same rate at which the costs are accumulating.

Example 2: When Projected Final Cost is Changed

Projected final changed to $500.

Once the cost to complete or projected final cost has been entered manually, the percent complete is adjusted to reflect these overrides. It is now stating that even though accumulated costs of $100 out of the $1000 budgeted, the job is now 20% complete rather than 10% complete.

This will affect how much it would cost to complete this work; if spending continues at the same rate and the job is now 20% complete, it will only cost $500 to complete this work rather than $1000.

NOTE: If the cost to complete had been adjusted to $400 the result would be the same.

Example 3: When Costs are Posted to the Job

Once a manual override has been entered, with the 'Freeze Projection' checkbox left unchecked, the subsequent postings will use this entered projected final amount to calculate percent complete. Continuing from the example above, since there is now a projected final of $500, the percent complete figure is calculated using the new cost against the entered projected final amount of $500.

NOTE: The unit to complete is calculated in the same manner as the estimate to complete, except the entries are made on a per unit basis as well as dollar amounts.