A work package has been scheduled to cost $1,000 to complete, and was to be finished today. As of today, the actual expenditure is $1,200 and approximately half of the work has been completed. What…

The correct answer is A. -$700. Cost Variance (CV) = Earned Value (EV) − Actual Cost (AC). With only 50% of the work done, the Earned Value is 50% × $1,000 = $500. Subtracting the actual spend gives $500 − $1,200 = −$700, confirming option A - the project is $700 over budget for the value delivered. Why the…

Project Control

Question

A work package has been scheduled to cost $1,000 to complete, and was to be finished today. As of today, the actual expenditure is $1,200 and approximately half of the work has been completed. What is the cost variance?

Options

A-$700
B-$200
C+$200
D+$500

How the community answered

(46 responses)

A
76% (35)
B
7% (3)
C
4% (2)
D
13% (6)

Explanation

Cost Variance (CV) = Earned Value (EV) − Actual Cost (AC). With only 50% of the work done, the Earned Value is 50% × $1,000 = $500. Subtracting the actual spend gives $500 − $1,200 = −$700, confirming option A - the project is $700 over budget for the value delivered.

Why the distractors fail:

B (−$200) uses AC − PV ($1,200 − $1,000), which ignores how much work was actually completed - a common trap.
C (+$200) reverses that same flawed formula (PV − AC), giving the wrong sign on top of the wrong approach.
D (+$500) mistakes the raw Earned Value figure ($500) for the variance itself, skipping the AC subtraction entirely.

Memory tip: Think "CV = EV − AC" as "Did I Earn enough to cover what I Actually spent?" If EV < AC, you overspent - negative variance. The key trap is forgetting to calculate EV first; always apply the percent complete to the planned budget before computing any variance.

Topics

#earned value#cost variance#EV calculation#CPI

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