A third method for determining the forecasted cost at completion is to re-estimate the costs for all the remaining work to be performed and then add this re-estimate to the cumulative actual cost.If the amount of cumulated actual costs is less than difference between the total budgeted cost and the re-estimate, then
A) the FCAC is greater than the TBC.
B) the FCAC is less than the TBC.
C) the FCAC cannot be calculated with the values given.
D) additional information is needed to predict the FCAC.

Question

Quizplus · Accepted Answer

If the amount of cumulated actual costs is less than the difference between the total budgeted cost and the re-estimate, it means that the re-estimate for the remaining work is lower than what was originally budgeted, indicating lower expected costs. Therefore, the FCAC is expected to be less than the TBC.

A Third Method for Determining the Forecasted Cost at Completion