---
title: "Cost control; EVA 15 houses in 3 months"
subject: "Project Engineering"
chapter: 4
key: "semester_7/project_engineering:eva-houses-15-in-3-months"
source: https://www.bctengineer.com/q/semester_7/project_engineering/eva-houses-15-in-3-months
site: BCT Engineering
---

# Cost control; EVA 15 houses in 3 months

Project Engineering · Chapter 4: Project Implementation and Controlling

- Asked in: 2070 Asar, 3+4 marks
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/project_engineering/eva-houses-15-in-3-months
- Whole chapter: https://www.bctengineer.com/md/semester_7/project_engineering/chapter-4

## Question

Why is cost control important in a project? 15 houses were to be completed in three months with a per unit cost of Rs 25,00,000. In one month 4 houses were completed with a total expenditure of Rs 96,00,000. Use earned value analysis to find the status of the project.

## Short answer

PV = 125 lakh, EV = 100 lakh, AC = 96 lakh; SV = -25 lakh, CV = 4 lakh, SPI = 0.800, CPI = 1.042. The project is behind schedule but under budget.

## Answer

#### Importance of cost control

- It keeps the actual cost within the budget and avoids overrun.
- It shows variances early, so that corrective action can be taken.
- It helps to forecast the final cost and the cash needed.
- It increases profit, efficiency and the client's confidence.

#### Earned value analysis

Money is in Rs lakh (Rs 25,00,000 = Rs 25 lakh per house).

- BAC = 15 x 25 = Rs 375 lakh (Rs 3.75 crore)
- After 1 month: planned = 1/3 of the work (5 houses); completed = 4 houses; actual cost = Rs 96 lakh

$$
\begin{aligned}
PV &= \frac{1}{3} \times 375 = 125.00\\
EV &= 4 \times 25 = 100.00\\
AC &= 96.00
\end{aligned}
$$

#### Calculation

$$
\begin{aligned}
SV &= EV - PV = 100.00 - 125.00 = -25.00\\
CV &= EV - AC = 100.00 - 96.00 = 4.00\\
SPI &= EV/PV = 100/125 = 0.800\\
CPI &= EV/AC = 100/96 = 1.042\\
EAC &= BAC/CPI = 375.00/1.0417 = 360.00\\
ETC &= EAC - AC = 360.00 - 96.00 = 264.00\\
VAC &= BAC - EAC = 375.00 - 360.00 = 15.00\\
\text{Forecast duration} &= 3/SPI = 3/0.800 = 3.75\ \text{months}
\end{aligned}
$$

#### Comment

- **Schedule:** SV is negative and SPI = 0.800, so the project is **behind schedule**. Only 80 % of the planned work is done. At this rate the work will take about 3.75 months instead of the planned 3 months.
- **Cost:** CV is positive and CPI = 1.042, so the project is **under budget**. Each Rs 1 spent gives Rs 1.04 of work.
- **Forecast:** if the present cost trend continues, the final cost will be Rs 360 lakh against the budget of Rs 375 lakh (variance at completion = Rs 15 lakh saving).

**Answer: SV = -Rs 25 lakh, CV = Rs 4 lakh, SPI = 0.800, CPI = 1.042; the project is behind schedule and under budget.**

Cost is favourable but progress is slow. Controlling statements: add resources or work extra shifts to recover the delay, remove bottlenecks (material, equipment, approvals), and keep the present cost discipline.

Five houses were planned in the first month, but only 4 were finished. The project is behind schedule (it needs about 3.75 months instead of 3), but the cost is slightly under budget.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Which is a benefit of cost control?
   A. It lets the project spend more than budget safely
   B. It shows variances early and helps forecast final cost and cash needs
   C. It replaces quality control
   D. It removes the need for a budget
   Answer: B. Cost control shows variances early so corrective action is taken, and it helps forecast final cost and cash. (Key point: Why cost control matters)

2. 15 houses at Rs 25 lakh each, one month of three elapsed. What are BAC and PV?
   A. BAC = 375 lakh, PV = 125 lakh
   B. BAC = 375 lakh, PV = 100 lakh
   C. BAC = 125 lakh, PV = 375 lakh
   D. BAC = 96 lakh, PV = 125 lakh
   Answer: A. BAC = 15 x 25 = 375 lakh; one-third elapsed gives PV = 375/3 = 125 lakh. (Key point: BAC and PV)

3. 4 houses are completed with Rs 96 lakh spent. What is EV, and what is CV?
   A. EV = 96, CV = 0
   B. EV = 100, CV = +4
   C. EV = 125, CV = +29
   D. EV = 100, CV = -4
   Answer: B. EV = 4 x 25 = 100 lakh; CV = EV - AC = 100 - 96 = +4, so under budget. (Key point: Earned value vs actual cost)

4. Here SPI = 0.800 and CPI = 1.042. What is the status?
   A. Ahead of schedule and over budget
   B. Behind schedule and over budget
   C. Behind schedule and under budget (needs about 3.75 months)
   D. On schedule and on budget
   Answer: C. SPI = 100/125 = 0.8 means behind (3/0.8 = 3.75 months); CPI = 100/96 = 1.042 means under budget. (Key point: Status interpretation)

## Related in Project Engineering

- [EVA; 60 days, 25% work, Rs 12,00,000](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aeva-numerical-60-days-25-percent) — Project Engineering, chapter 4
- [EVA and S-curve; Rs 30,00,000, 24 months](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aeva-s-curve-24-months-c76) — Project Engineering, chapter 4
- [Cost control need; earned value; EVA approach](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Acost-control-necessary-eva-approach) — Project Engineering, chapter 4
- [EPS and book value; ABC project Rs 6,00,000](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aeps-bv-abc-project-600000-b79) — Project Engineering, chapter 6
- [EVA application; 35 days, Rs 8,00,000 spent](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aeva-applicable-monitoring-numerical-b82) — Project Engineering, chapter 4
- [EPS; total capital Rs 15,00,000](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aeps-capital-1500000-pref-loan-a74) — Project Engineering, chapter 6

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- [Earned value analysis for performance control](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Aeva-performance-control) — Construction Management, chapter 7, asked 6×
- [Earned value management](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aevm) — ICT Project Management, chapter 9
- [Valuation of a cinema hall (land Rs 15 lakh)](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-cinema-hall-2077) — Construction Management, chapter 13, asked 2×