Your project has an EV of 100 work-days, an AC of 120 work-days, and a PV of 80 work-days. What should be your concern?

Question

Options

• AThere is a cost under run.
• BThere is a cost overrun.
• CMay not meet deadline.
• DThe project is 20 days behind schedule.

• A
  5% (1)
• B
  76% (16)
• C
  14% (3)
• D
  5% (1)

Explanation

Cost Variance (CV) = EV − AC = 100 − 120 = −20, a negative value that signals you have spent 20 more work-days than the value you've earned - a cost overrun, making B correct. Option A is wrong because a cost underrun would require AC < EV, the opposite of what's shown. Options C and D are wrong because Schedule Variance (SV) = EV − PV = 100 − 80 = +20, meaning the project is actually 20 days ahead of schedule, not behind. The tricky part of this question is that the numbers seem alarming, but the schedule data is good news - only the cost data is problematic.

Memory tip: Use the phrase "Is it Cost or Schedule? Subtract from EV." CV = EV − AC; SV = EV − PV. Negative result = bad (over budget or behind schedule); positive result = good. Here, CV is negative (bad) and SV is positive (good) - cost overrun, schedule fine.

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