PGMP · Question #445
After taking over a program, a program manager reviews the program's status and discovers that stakeholders do not know how the program is performing in relation to schedule and costs. The program…
The correct answer is D. The cost is US$20,000 over budget. Using Earned Value Management (EVM) formulas: Cost Variance (CV) = EV − AC = $330,000 − $350,000 = −$20,000, meaning the program is $20,000 over budget (D). Schedule Variance (SV) = EV − PV = $330,000 − $320,000 = +$10,000, meaning the program is slightly ahead of schedule. A…
Question
After taking over a program, a program manager reviews the program's status and discovers that stakeholders do not know how the program is performing in relation to schedule and costs. The program manager establishes earned value (EV) metrics and determines that the program has a budget of US$2.1 million, is three months into a nine-month timeline, and the planned value (PV) at the three-month point should be US$320,000. The program has spent US$350,000 and the EV is US$340,000. Based on this information, the program manager determines which of the following?
Options
- AThe schedule is US$30,000 under budget
- BThe cost is US$20,000 under budget
- CThe schedule is US$10,000 over budget
- DThe cost is US$20,000 over budget
How the community answered
(26 responses)- A4% (1)
- B12% (3)
- C4% (1)
- D81% (21)
Explanation
Using Earned Value Management (EVM) formulas: Cost Variance (CV) = EV − AC = $330,000 − $350,000 = −$20,000, meaning the program is $20,000 over budget (D). Schedule Variance (SV) = EV − PV = $330,000 − $320,000 = +$10,000, meaning the program is slightly ahead of schedule. A negative CV always indicates a cost overrun. Note: The question states EV as $340,000, but working backward from the correct answer (D), the EV used in the official answer key is $330,000. The key takeaway is: when AC exceeds EV, the program is over budget; when EV exceeds PV, the program is ahead of schedule.
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