Fred is the project manager of the NHA project. This project has a BAC of $2,456,900 and is sixty
percent complete. Fred has crashed the project, which has driven the project costs to date to
$1,525,140, but his project is five percent more complete than what was planned. What is the cost
variance for this project that Fred needs to report to management?

A.
$122,845

B.
-$51,000

C.
-$85,000

D.
Zero

Explanation:
The cost variance for the project is -$51,000. You can find the cost variance by using the formula
earned value minus planned value. In this instance, it is: CV = EV – AC = (0.60* 2,456,900) -1,525,140 = -51,000
Answer option C is incorrect. -$85,000 is the project’s variance at completion.
Answer option A is incorrect. $122,845 is the project’s schedule variance.
Answer option D is incorrect. There is a cost variance on this project of -$51,000.