According to the PMBOK® Guide (Project Management Body of Knowledge), specifically within the Project Cost Management knowledge area and the Control Costs process, the Cost Variance (CV) is a measure of cost performance expressed as the difference between the earned value and the actual cost.
To calculate the CV for Task 6 using the data provided in the table:
Identify the variables for Task 6:
Earned Value (EV) = 12,000
Actual Cost (AC) = 10,000
Apply the CV Formula:
$$\text{CV} = \text{EV} - \text{AC}$$
$$\text{CV} = 12,000 - 10,000 = 2,000$$
Option D (2,000): This is the correct calculation. A positive cost variance indicates that the project is under budget for the work performed. In this instance, Task 6 has accomplished $2,000$ more work than the costs actually incurred to do that work.
Option A (-2,000): This would be the result if you incorrectly subtracted EV from AC ($10,000 - 12,000$). A negative CV would indicate the project is over budget, which is not supported by the Task 6 data.
Option B (0): This would occur if EV and AC were equal (as seen in Task 1 or Task 7), indicating the project is performing exactly on budget.
Option C (1,000): This result is mathematically inconsistent with the provided Task 6 figures.
In the PMI framework, the Cost Variance (CV) is a vital metric for the Monitor and Control Project Work process. It provides a clear snapshot of financial performance, helping the Project Manager determine if corrective actions are needed to bring project spending back in line with the cost baseline.
