Which tool should a project manager use to calculate cost variance for a project?

The correct answer is C. Actual cost. Cost Variance (CV) is calculated using the formula: CV = Earned Value (EV) – Actual Cost (AC). To perform this calculation, the project manager must have the Actual Cost (AC) - the real money spent on the work performed to date. Without actual cost data, CV cannot be computed…

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Question

Which tool should a project manager use to calculate cost variance for a project?

Options

AContingency analysis
BExpert judgment
CActual cost
DReview lessons learned from similar projects

How the community answered

(37 responses)

A
5% (2)
B
3% (1)
C
89% (33)
D
3% (1)

Explanation

Cost Variance (CV) is calculated using the formula: CV = Earned Value (EV) – Actual Cost (AC). To perform this calculation, the project manager must have the Actual Cost (AC) - the real money spent on the work performed to date. Without actual cost data, CV cannot be computed. Contingency analysis, expert judgment, and lessons learned are useful project management tools, but none of them are inputs used to mathematically calculate cost variance.

Topics

#Cost Variance (CV)#Earned Value Management (EVM)#Project Cost Management#Actual Cost (AC)

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