Calculate earned value ev for the first two weeks of the

Question

You and your spouse have purchased a foreclosure you hope to flip for a profit. The two bathrooms had been recently remodeled by the previous owners. The three bedrooms need only cosmetic work - something you decide to undertake yourself. The majority of your budget will be used for remodeling the kitchen, the dining room, and the family room.

Since this is your first flip, you've hired an experienced home inspector to help you scope the project. You want to track costs carefully to stay as close to budget as possible and to give you an accurate baseline for similar work in future flips. Rather than doing a hierarchical decomposition of the project into various products/outcomes and then adding work package descriptors for each lowest-level product/outcome, you chose to list the components that needed work and then describe the work that must be completed for each of these components. NOTE: Assume your descriptions of the work that must be completed for each of the components are work package descriptors and that these work package descriptors are NOT decomposed into lower level elements.

Some of the work may have to take a higher priority if cost issues arise during the renovation. The higher priority work includes modifications to the electrical, HVAC, and plumbing systems, removal of two walls to provide an open concept arrangement, and common flooring throughout the kitchen, family room, and dining room areas. The quality of other finishes in the kitchen, dining room, and/or family room may have to be reduced if the cost of the higher priority work becomes an issue.

You decide to work backwards from your current list of work (shown below) to develop a WBS. You start by adding an element that represents the entire project and numbering it zero. You also decide to add several control accounts so that you can monitor and manage costs more effectively. These control accounts include:
- Higher Priority Work
- Lower Priority Work
- Utilities and Services (Electrical, HVAC, and Plumbing)
- Wall Removals
- Kitchen
- Dining Room (DR)
- Family Room (FR)

1. Without otherwise modifying the WBS structure, add the control accounts listed above.

2. Complete numbering the work breakdown structure so that Microsoft Project will automatically roll up work package costs to these control accounts.

NOTE: Your WBS must not violate any WBS core characteristics.

WBS No.	WBS Element
0	Three-Room Renovation
	Electrical System
	Upgrade the electrical service to 200 amps
	Replace the electrical panel
	Rerun electrical circuits affected by wall removals
	Run four new electrical circuits to the kitchen area
	HVAC
	Install new furnace and air conditioning units
	Rerun heating and ventilation ducts affected by wall removals
	Install ventilation duct for new kitchen range hood
	Install ventilation duct for new kitchen microwave
	Plumbing Systems
	Install larger diameter water pipe from water meter to the house
	Install tank-less hot water heater
	Rerun water pipes affected by wall removals
	Rerun vent pipes affected by wall removals
	Install water supply pipe for refrigerator ice maker
	Wall 1 Removal - Between Kitchen and Dining Room
	Demolish existing wall 1
	Install new beam 1 to accept existing structural loads
	Repair ceiling in way of the new beam 1
	Wall 2Removal - Between Dining Room and Family Room
	Demolish existing wall 2
	Install new beam 2 to accept existing structural loads
	Repair ceiling in way of the new beam 2
	Flooring
	Install new laminate flooring in the kitchen, dining room, and family room
	Kitchen Window (Over Sink)
	Remove existing window over the sink
	Install new energy efficient window over the sink
	Replace/repair drywall as necessary around the kitchen window
	Install kitchen window trim
	Kitchen Lighting
	Replace existing can lights
	Install new pendant lights over the island
	Kitchen Cabinets, Island, and Countertops
	Kitchen Cabinets
	Install upper cabinets
	Install lower cabinets
	Install cabinet hardware
	Kitchen Island
	Install island
	Install island hardware
	Kitchen Countertops
	Install cabinet countertops
	Install island countertop
	Kitchen Painting
	Repair any remaining drywall defects in the kitchen
	Paint the kitchen
	Kitchen Appliances
	Install range top
	Install oven
	Install microwave
	Install refrigerator
	Install dishwasher
	DR Window
	Remove existing DR window
	Install new energy efficient DR window
	Replace/repair drywall as necessary round the DR window
	Install DR window trim
	DR Lighting
	Install new DR chandelier
	DR Painting
	Repair any remaining drywall defects in the DR
	Paint the DR
	FR Windows
	Remove three existing FR windows
	Install three new energy efficient FR windows
	Replace/repair drywall as necessary around FR windows
	Install FR window trim
	FR Sliding Door
	Remove existing FR sliding door
	Reframe as necessary for new French door
	Install new energy efficient French door
	Replace/repair drywall as necessary around the door
	Install door trim
	FR Painting
	Repair any remaining drywall defects in the FR
	Paint the FR

Birdhouse Construction Plan

Week	No. by Design
	First	Second	Third
1	7	4	2
2	4	4	3
3	7	3	3
4	4	4	4
5	3	5	3
Total	25	20	15

3. Calculate the planned budget for each week of the project and for the total project.

Week 1 = 5*7 + 10*4 + 15*2 = $ 105
Week 2 = 5*4 + 10*4 + 15*3= $ 105
Week 3 = 5*7 + 10*3 + 15*3=$ 110
Week 4 = 5*4 + 10*4 + 15*4=$ 120
Week 5 = 5*3 + 10*5 + 15*3=$ 110
Planned budget for total project = 105 + 105 + 110 + 120 + 110 = $ 550

4. At the end of week 2, you look at your actual progress and find the following:

	Actual Progress (end of week 2)
Week	No. by Design
	First	Second	Third
1	6	4	2
2	4	4	4

Calculate Earned Value (EV) for the first two weeks of the project and the project to-date.

5. Is the project ahead of schedule, on schedule, or behind schedule? What EVM information are you using to make this assessment and why?

6. Is the project over budget, under budget, or on budget? What EVM information are you using to make this assessment and why?

7. Assuming you continue working as you are without making any changes to your processes or materials, what is the forecast of total project cost? Will you exceed your total available funds?

8. Assuming you continue working as you are without making any changes to your processes or materials, what is the Variance at Completion (VAC)?

9. At the end of week 3 you discover you that SV is still positive but SPI is 0.95. What does this mean?