Cost Variance (CV) = EV – AC (Earned Value – Actual Cost).
At the end of a project, EV = BAC (Budget at Completion), so Cost Variance after a project wraps up is BAC – AC.
Variance is the difference between actual time and planned time, or actual cost and planned cost.. Variance Analysis is used to improve the metrics of the organization by comparing what was initially planned and the end result. It is a tool and technique of:
- Monitor and Control Project Work
- Close Project or Phase
- Control Schedule
- Control Costs
- Control Scope
Variance Analysis is the quantitative investigation of the difference between actual and planned performance. It determines the cause and deviation between the Baseline and actual performance (Earned Value or Actual Cost for instance) in order to maintain control over a project. Cost and Schedule are the most frequently analyzed variances.
Variance Analysis is the explanation of variances (cause, impact and corrective actions) for Cost (CV = EV – AC), Schedule (SV = EV – PV) and VAC (BAC – EAC).
Variance at Completion (VAC) tells you how much the budget will be at completion. VAC is a projection of the amount of budget deficit or surplus expressed as the difference between the BAC and the EAC. VAC = BAC – EAC.
Cost Variance (CV) = EV – AC (Earned Value – Actual Cost)
At the end of a project, EV = BAC (Budget at Completion), so Cost Variance after a project wraps up is BAC – AC.