ISEB-PM1 · Question #503
Which of the following equations is used to calculate cost variance?
The correct answer is A. EV-AC. Cost Variance (CV) = EV − AC (option A), where Earned Value minus Actual Cost tells you whether you're under or over budget - a positive result means under budget, negative means over. Option B (AC − EV) simply reverses the formula, flipping the sign and making over-budget look…
Question
Which of the following equations is used to calculate cost variance?
Options
- AEV-AC
- BAC-EV
- CAC+EV
- DAC/EV
How the community answered
(56 responses)- A73% (41)
- B9% (5)
- C14% (8)
- D4% (2)
Explanation
Cost Variance (CV) = EV − AC (option A), where Earned Value minus Actual Cost tells you whether you're under or over budget - a positive result means under budget, negative means over. Option B (AC − EV) simply reverses the formula, flipping the sign and making over-budget look positive, which contradicts the standard interpretation. Options C and D (AC + EV and AC / EV) are not standard earned value formulas at all - addition and division of these two metrics produce meaningless results for variance purposes. A handy memory tip: "CV = EV − AC" follows alphabetical order (E before A), so remember E comes before A in Cost Variance, just as it does in the alphabet.
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