Your project has a budget of $240,000 and is expect to las for 1 year, with the work and budget spread evenly across all months. The project is now in the fourth month, the work is on schedule, but you have spent $120,000 of the project budget. What is your COST Variance percentage in this case?

A.
-50%

B.
50%

C.
40%

D.
20%

Explanation:
Solution:
Execute Percentage > 12 ———- 100%
04 ———- X

X= 0.333333%

EV Earned Value= Execute Percentage% * Budget of the project
EV=0.33333%*240.000
EV= 80.000
AC= Actual Cost = 120.000

CV= EV – AC
CV= 80.000-120.000 = -40.000

CV% = CV/EV
CV% = -40.000/80.000 = -0.5
CV% = -50%

Cost Variance (CV) is very important factor to measure project performance. Cost Variance (CV) indicates how much over or under budget the project is.
Cost Variance can be calculated as using the following formula

Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC)

OR

Cost Variance (CV) = BCWP – ACWP

The formula mentioned above gives the variance in terms of cost which will indicate how less or more cost has been to complete the work as of date.

Positive Cost Variance Indicates the project is under budget
Negative Cost Variance Indicates the project is over budget

Cost Variance %
Cost Variance % indicates how much over or under budget the project is in terms of percentage.

Cost Variance % can be calculated as using the following formula

CV % = Cost Variance (CV) / Earned Value (EV)

OR

CV % = CV / BCWP

The formula mentioned above gives the variance in terms of percentage which will indicate how much less or more money has been used to complete the work as planned in terms of percentage.

Positive Variance % indicates % under Budget.
Negative Variance % indicates % over Budget.