Cost Variance Notes: Definitions & Explanations PDF | Download eBooks
Study Cost Variance lecture notes PDF with project management definitions and explanation to study “What is Cost Variance?”. Study cost variance explanation with project management terms to review project management course for online MBA programs.
Cost Variance Definitions:
Cost variance (CV) is the difference between the cumulative earned value of the work performed and the cumulative actual cost.
Successful Project Management by Jack Gido and James P. Clements
Cost variance compares deviations only from the budget and does not provide a measure of comparison between work scheduled and work accomplished.
Project Management: A Systems Approach to Planning, Scheduling, and Controlling by Harold Kerzner?
Cost variance (CV) is the amount of budget deficit or surplus at a given point in time, expressed as the difference between earned value and the actual cost.
A Guide to the Project Management Body of Knowledge by Project Management Institute
Cost Variance Notes:
It is important to monitor if the actual work performed is according to the plan. In addition, the actual and the estimated/planned costs are also compared for monitoring purpose. The cost performance of a project is analyzed using different performance measures. One of the cost performance indicator is called cost variance. Cost variance considers cumulative earned value and cumulative actual cost of a project or a work package in the calculation. The value of cost variance is calculated by subtracting cumulative actual cost from cumulative earned value. This shows the gap between the value of the work performed and the actual cost. Cost variance can be positive or negative.
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