After collecting the control information on a light rail project within an original budget of 200.000 work hours, the construction contractor is ready for their monthly progress meeting with the client. A total of 100.000 work hours have boon scheduled to date. with 105.000 work hours earned, and 110.000 work hours paid. The stated progress by the contractor Is 60%. What is the cost variance (CV)?

Cost Variance (CV) is a fundamental metric in Earned Value Management (EVM) that measures the project's cost performance. It is calculated as the difference between the value of the work performed and the actual cost incurred to perform that work. The standard AACE International formula is CV = BCWP - ACWP (Budgeted Cost of Work Performed minus Actual Cost of Work Performed). Given the data: Budgeted Cost of Work Performed (BCWP or Earned Value) = 105,000 work hours Actual Cost of Work Performed (ACWP or Actual Cost) = 110,000 work hours Applying the formula: CV = 105,000 - 110,000 = -5,000 work hours. A negative result indicates a cost overrun.

B. This option incorrectly inverts the standard formula (ACWP - BCWP), which would misrepresent the cost performance by reporting a positive variance instead of a negative one.
C. This formula (BCWS - ACWP) is not a standard EVM metric. It incorrectly compares the planned work value against the actual cost, ignoring the actual work accomplished (BCWP).
D. This option is the inverse of option C and is also not a valid EVM formula for calculating cost variance.

1. AACE International, Recommended Practice 10S-90, "Cost Engineering Terminology" (June 29, 2022).

Page 33: Defines Cost Variance (CV) as "A measure of cost performance on a project. It is the algebraic difference between earned value (BCWP) and actual cost (ACWP). CV = BCWP – ACWP. A positive value indicates a cost underrun and a negative value indicates a cost overrun."

Page 15: Defines Budgeted Cost of Work Performed (BCWP) as "The sum of the budgets for completed portions of in-process work, plus the appropriate portion of the budget for level of effort and apportioned effort. Also called earned value (EV)."

Page 6: Defines Actual Cost of Work Performed (ACWP) as "The costs actually incurred and recorded in accomplishing the work performed within a given time period. Also called actual cost (AC)."

2. Humphreys, G. C. (2018). Project Management Using Earned Value (4th ed.). Humphreys & Associates, Inc. (A foundational text often referenced in CCP preparation).

Chapter 5, "Performance Measurement," Section "Cost Variance (CV)": Explicitly states the formula as CV = BCWP - ACWP and explains that a negative variance indicates that the cost of the work performed was greater than planned.

3. Fleming, Q. W., & Koppelman, J. M. (2016). Earned Value Project Management (4th ed.). Project Management Institute.

Page 41, Table 4-1 "The Five Core EVM Data Metrics": Defines Cost Variance (CV) with the formula CV = BCWP - ACWP, describing it as the difference between the budgeted cost and the actual cost of the work performed.