You work as a Project Manager for Tech Perfect Inc. You are looking for performance efficiencies
of a project. The related key values are provided in the table below:

What will be the cost variance (CV) of the project at the current point of time?

A.
+80

B.
-80

C.
-10

D.
+10

Explanation:
According to the question, you are required to calculate the cost performance index (CPI) of the
project. Cost variance (CV) is a measure of cost performance on a project. The variance notifies if
costs are higher than budgeted or lower than budgeted. The cost variance is calculated based on
the following formula: CV = Earned Value (EV) – Actual Cost (AC) A positive value means that
spending is less than budgeted, whereas a negative value indicates that costs are higher than
originally planned for the project. Now, putting the provided values in the formula: CV = EV – AC =
320 – 400 = -80 As the value of CV (which is -80) is negative, it shows that the costs are higher
than that have been planned for the project. What is BCWP (or EV)? Budgeted cost of work
performed (BCWP) or Earned Value (EV) is the value of completed work. It is the budgeted
amount for the work actually completed on the schedule activity during a given time period. What
is BCWS (or PV)? Budgeted Cost of Work Scheduled (BCWS) or Planned Value (PV) is the
authorized budget assigned to the scheduled work to be accomplished for a schedule activity or
Work Breakdown Structure (WBS) component. What is ACWP (or AC)? Actual cost of work
performed (ACWP) or Actual Cost (AC) is the total costs actually incurred and recorded in
accomplishing work performed during a given time period for a schedule activity. It is the cost of
the work to date, including direct and indirect costs. AC is money that has actually been expended
to date.