Which of the following equations is used to calculate cost variance?

A.
EV-AC

B.
AC-EV

C.
AC+EV

D.
AC/EV

Explanation:
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.