If a program has a budget of completion of $550,000, is 25 percent complete, and has spent $135,000 what is the cost variance (CV)?

The correct answer is C. $2,500. Cost Variance (CV) = Earned Value (EV) − Actual Cost (AC). First, calculate EV: EV = BAC × % Complete = $550,000 × 0.25 = $137,500. Then calculate CV: CV = $137,500 − $135,000 = $2,500. A positive CV means the program is under budget. The value 0.99 and 1.02 resemble a Cost Perfo

Program Life Cycle

Question

Options

A.99
B-$2,500
C$2,500
D1.02

How the community answered

(45 responses)

A
2% (1)
B
11% (5)
C
82% (37)
D
4% (2)

Explanation

Cost Variance (CV) = Earned Value (EV) − Actual Cost (AC). First, calculate EV: EV = BAC × % Complete = $550,000 × 0.25 = $137,500. Then calculate CV: CV = $137,500 − $135,000 = $2,500. A positive CV means the program is under budget. The value 0.99 and 1.02 resemble a Cost Performance Index (CPI = EV/AC), not a variance. A negative $2,500 would indicate an over-budget condition, which is not the case here.

Topics

#Earned Value Management (EVM)#Cost Variance (CV)#Program Performance Measurement#Cost Control

Community Discussion

No community discussion yet for this question.

Full PGMP Practice