Based on the following metrics: EV=$20,000, AC=$22,000 and PV=$28,000, what is the project CV?

The correct answer is B. -$2,000. Cost Variance (CV) = EV − AC, so $20,000 − $22,000 = −$2,000, making B correct - the project is over budget by $2,000 because you spent more than the work is worth. Why the distractors are wrong: A (−$8,000) is the Schedule Variance (SV = EV − PV = $20,000 − $28,000), not CV…

Project Control

Question

Options

A-$8,000
B-$2,000
C$2,000
D$8,000

How the community answered

(17 responses)

A
12% (2)
B
82% (14)
C
6% (1)

Explanation

Cost Variance (CV) = EV − AC, so $20,000 − $22,000 = −$2,000, making B correct - the project is over budget by $2,000 because you spent more than the work is worth.

Why the distractors are wrong:

A (−$8,000) is the Schedule Variance (SV = EV − PV = $20,000 − $28,000), not CV - a common mix-up when all three metrics are given.
C ($2,000) is the result of flipping the subtraction (AC − EV reversed), ignoring the correct formula order.
D ($8,000) reverses the SV formula (PV − EV), which is neither CV nor SV correctly calculated.

Memory tip: Think "CV = EV minus AC" - alphabetically, E comes before A, so subtract in that order. A negative CV always means over budget (you paid more than the value earned).

Topics

#cost variance#CV calculation#earned value management#EV AC PV

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