Why budget minus actuals understates cost
The lazy ETC is "whatever's left in the budget." It always makes the account look on track. Here's the difference on an electric labor account at the end of week 2 of a 5-week shoot:
| Method | Budget | To date | ETC | EFC | Variance |
|---|---|---|---|---|---|
| Lazy (budget minus to date) | $95,000 | $44,000 | $51,000 | $95,000 | $0 |
| Based on actual pace | $95,000 | $44,000 | $66,000 | $110,000 | ($15,000) |
Two weeks cost $44,000, so the pace is $22,000 a week. Three weeks remain: 3 x $22,000 = $66,000. EFC is $44,000 + $66,000 = $110,000, and the account is heading $15,000 over. If a planned stage week with shorter days is coming, you'd adjust that pace down for that week and note why.
Building ETC line by line
A good ETC is built from what is still scheduled, not from what's left:
- Look at the remaining shooting schedule and count days by type (stage, location, night, company move).
- Apply the actual daily cost from hot costs for similar days.
- Add known changes: an extra rigging crew, a condor for the night exteriors, kit rental weeks.
- Add wrap costs the budget forgot, such as returns, loss and damage, and final payroll.
- Subtract anything already in open purchase orders so it isn't counted twice.
That last step is where many cost reports double-count. If a $12,000 PO for the lighting package covers the remaining weeks, the ETC for rentals is $0 for that package, not $12,000.
Who acts on it
ETC is what the line producer uses to decide whether to cut a setup, move a scene to a cheaper day, or ask to draw on contingency. A completion guarantor reads the total ETC across all accounts to judge whether the film will finish within the locked budget. Changes in EFC from week to week show up as movement in budget variance, and a variance that keeps growing gets more attention than a large one that stays put.