Question

The budget for a project designated $2000 for work performed and till this point in time, has spent $5000. If the budget had included $7000 for the work scheduled on the project, what is the value of the cost variance (CV)

Answer 1

Cost variance (CV) is the earned value minus the actual value.

Cost variance (CV), also called price range variance, is the difference between the actual price and the budgeted fee, or what you anticipated to spend versus what you definitely spent. This system enables mission managers to discern if they may be over or under budget.

The fee variance is defined as the 'difference between an earned fee and actual prices. (CV = EV – AC)' (PMI, 2004, p. 357) sometimes this component is expressed because of the distinction between the budgeted fee of work accomplished and the actual cost of paintings done.

Effective cost variances are favorable indicating that paintings were completed underneath finances. Early destructive price variances are a sturdy indicator of capability agreement overruns. price variance often lags behind schedule variance and not like timetable variance no longer improve because the settlement nears the finishing touch.

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