The acronym ACWP stands for "actual cost of work performed." This term applies to the total costs of a certain type of work over a period time. Total costs include direct and indirect costs. Being able to calculate ACWP is essential to budgeting for a business and managing a project effectively.
Add all direct costs. Direct costs are expenses that relate exclusively to a specific project. For instance, if your company is implementing a community youth after-school project for six months, you would add all of the salaries, supplies, employee benefits and utilities specifically related to that project.
Add all indirect costs. Indirect costs are those expenses that are incurred as a result of multiple projects. For instance, you may have some employees who are working with the after-school project as well as other projects. Their salaries and benefits would be indirect costs. You may have a building facility that is used for the after-school project on certain days and for other projects on other days. The utilities and rent for this building would be indirect costs.
Add your direct cost total to your indirect cost total in order to find the actual cost of work performed (ACWP).
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