George is the project manager of the NHQ Project and has a budget of $778,000. The project is scheduled to last for one year with an equal amount of work completed each quarter. The second quarter…

Question

Options

• A.96
• B-$77,800
• C$-34,500
• D-$13,800

• A
  4% (1)
• B
  72% (18)
• C
  16% (4)
• D
  8% (2)

Explanation

Schedule variance (SV) is a measure of schedule performance on a project. The variance notifies that the schedule is ahead or behind what was planned for this period in time. The schedule variance is calculated based on the following formula: SV = Earned Value (EV) - Planned Value (PV) If the resulting schedule is negative, it indicates that the project is behind schedule. A value greater than 0 shows that the project is ahead of the planned schedule. A value of 0 indicates that the project is right on target. The earned value in this instance is forty percent of the project budget, $778,000, and the planned value is $398,000 because George is to be fifty percent done at the end of the second quarter, as the work is spread evenly across all quarters. The schedule variance is -$77,800 for the project. Answer option A is incorrect. .96 represents the cost performance index. Answer option C is incorrect. -$34,500 represents the project's variance at completion if the project continues as is. Answer option D is incorrect. -$13,800 is the cost variance for the project.

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