Enter the total earned value and the actual cost incurred into the calculator to determine the cost performance index.

## Cost Performance Index Formula

The following equation is used to calculate the Cost Performance Index.

CPi = EV / AC
• Where CPi is the cost performance index
• EV is the earned value ($) • AC is the actual cost incurred ($)

To calculate the cost performance index, divide the earned value by the actual cost incurred.

## What is a Cost Performance Index?

Definition:

A cost performance index is a ratio of the earned value to the actual cost of a company’s business campaign, project, etc.

## How to Calculate the Cost Performance Index?

Example Problem:

The following example outlines the steps and information needed to calculate Cost Performance Index.

First, determine the total earned value. With the help of the calculator linked above, the earned value is found to be $4000.00. Next, determine the actual cost. The actual cost in this example problem is$2,000.00.

Finally, calculate the cost performance index using the formula above:

CPi = EV / AC

CPi = $4000 /$2000

CPi = 2.00

## FAQ

What does a Cost Performance Index (CPI) value greater than 1 indicate?
A CPI value greater than 1 indicates that the project is under budget relative to the work completed. It means the project is performing well in terms of cost efficiency, as it is spending less than planned for the amount of work being done.

Can the Cost Performance Index be used for forecasting?
Yes, the Cost Performance Index (CPI) can be used as a forecasting tool to estimate the cost performance of the remaining project work. It helps in predicting the project’s final cost and assessing the need for budget adjustments.

How does the Cost Performance Index (CPI) differ from the Schedule Performance Index (SPI)?
The Cost Performance Index (CPI) measures cost efficiency by comparing the earned value with the actual costs, whereas the Schedule Performance Index (SPI) measures time efficiency by comparing the earned value with the planned value. While CPI focuses on cost, SPI focuses on schedule or time performance.