Earned Value Analysis :Cost Variance

Earned Value Analysis is a Cost Control Tool/Technique. For a project manager Earned Value gives an idea on what you have achieved for the amount of money you spent. The main calculations in EV techniques are

1. Cost Variance : Compares Cost with budget

Cost Variance = Earned Value - Actual Cost

CV = EV - AC

If your Earned Value = 1000 and your Actual Cost is 900, your Cost Variance is 100. In this case CV is a positive number and you are running with in the budget or spending less than what you have budgeted. Instead of 900, if your actual cost is 1100, your Cost Variance is -100. In this case you have to be careful and check your spending against plan.



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