What cost control technique is used to compare actual project performance to planned or expected performance?

Question

Options

• ACost aggregation
• BTrend analysis
• CForecasting
• DVariance analysis

• A
  4% (2)
• B
  11% (5)
• C
  2% (1)
• D
  83% (39)

Explanation

Variance analysis (D) is the technique that directly compares actual project performance against a baseline or planned performance, calculating the difference (variance) to determine whether the project is on track, over budget, or behind schedule. It's the core measurement mechanism in Earned Value Management (EVM), producing metrics like Cost Variance (CV) and Schedule Variance (SV).

Why the others are wrong:

• A. Cost aggregation - a planning technique that rolls up lower-level cost estimates into higher-level totals (e.g., work packages → control accounts); it doesn't compare actual vs. planned.
• B. Trend analysis - examines performance data over time to forecast future outcomes; it looks at direction, not the gap between actual and planned.
• C. Forecasting - predicts future project costs (e.g., Estimate at Completion); it uses variance data as input but is forward-looking, not a comparison tool itself.

Memory tip: Think of "variance" as the gap - Variance Analysis measures the gap between where you are and where you planned to be. If you see "compare actual to planned," the answer is always variance.

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