Lessons · Project management · cost and schedule variance

CV and SV: how far off, in dollars

Cost variance is EV − AC and schedule variance is EV − PV; negative is bad, positive is good, and both are in dollars.

Hone is a place to practise a career, one idea a day. This is one of its lessons, written out in full and free to read without an account.

What it is for

The status meeting: are we over? A shrug is not an answer. Cost variance is minus twenty thousand dollars is. It says how far, in a unit the sponsor already thinks in, and it says which direction.

How to think about it

Earned value first in both formulas, always. CV compares done against paid: EV − AC. SV compares done against planned: EV − PV. Negative means the work done is worth less than what was paid, or less than what was planned.

Worked example

EV = $80,000, AC = $100,000, PV = $100,000

The three from the status.

CV = 80,000 − 100,000 = −$20,000

Twenty thousand dollars over cost, for the work done so far.

SV = 80,000 − 100,000 = −$20,000

Twenty thousand dollars of planned work not yet done. Schedule variance in dollars, not days.

Both negative: late and over

The one-line status.

Your turn

EV is $54,000 and AC is $63,000. Write the cost variance.

CV = 54,000 −  = −$9,000

The trap

Writing AC − EV because it gives a positive number. The formula starts with EV so that the sign carries the meaning: negative is always bad.

Practise cost and schedule variance on HoneA question on it now, a coding challenge where there is one, and it is remembered for review. Free, no email needed.