PK0-003 · Question #189
The project has spent $5,000 to date. The earned value of the project is $7,500. Using earned value management, which of the following is correct?
The correct answer is D. The project is under budget.. This question assesses understanding of earned value management (EVM) metrics, specifically cost variance, to determine a project's budget status.
Question
The project has spent $5,000 to date. The earned value of the project is $7,500. Using earned value management, which of the following is correct?
Options
- AThe project is ahead of schedule.
- BThe project is over budget
- CThe project is behind schedule.
- DThe project is under budget.
How the community answered
(38 responses)- A13% (5)
- B5% (2)
- C3% (1)
- D79% (30)
Why each option
This question assesses understanding of earned value management (EVM) metrics, specifically cost variance, to determine a project's budget status.
Being ahead of schedule relates to Schedule Variance (SV) or Schedule Performance Index (SPI), which compares Earned Value to Planned Value, not Actual Cost.
Being over budget would mean the Actual Cost is greater than the Earned Value (AC > EV), which is not the case in this scenario.
Being behind schedule relates to Schedule Variance (SV) or Schedule Performance Index (SPI), which compares Earned Value to Planned Value, not Actual Cost.
Earned Value (EV) is the value of the work performed, which is $7,500, and Actual Cost (AC) is the cost incurred for that work, which is $5,000. Since EV ($7,500) is greater than AC ($5,000), the project has completed more value for less money than spent, indicating it is under budget. This is confirmed by a positive Cost Variance (CV = EV - AC = $7,500 - $5,000 = $2,500).
Concept tested: Earned Value Management (EVM) Cost Variance calculation
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