A project has a budget of $1000 and actual costs equal planned costs. What is the cost variance?

Enhance your skills for the Ascension Composite Cadet Competition. Prepare with focused flashcards and engaging multiple choice questions, all with detailed hints and explanations. Ace your exam with confidence!

Multiple Choice

A project has a budget of $1000 and actual costs equal planned costs. What is the cost variance?

Cost variance shows whether spending matches the plan. In Earned Value terms, CV = EV − AC, where EV is the value of work actually completed (the budgeted cost of that work) and AC is what has been spent. If actual costs equal planned costs, the earned value and the actual cost are the same, so CV = EV − AC = 0. This means there is no variance—spending is exactly on target.

Cost variance shows whether spending matches the plan. In Earned Value terms, CV = EV − AC, where EV is the value of work actually completed (the budgeted cost of that work) and AC is what has been spent. If actual costs equal planned costs, the earned value and the actual cost are the same, so CV = EV − AC = 0. This means there is no variance—spending is exactly on target.

More practice questions