Question

Negative value of cost variance (CV) of construction project indicates that project is
1. Behind schedule 
2. Over budget
3. Under budget 
4. On schedule

Answer 1

Correct Answer - Option 2 : Over budget

Concept-

Cost Variance (CV):

• Cost variance is basically related with the budget of the project.
• Cost variance is the difference of the actual cost and the expected cost.
• Cost Variance is calculated by taking the difference of the Earned Value and the Actual Cost.
• If the cost variance is positive then the project is under budget.
• If the cost variance is zero then the project is on budget.
• If cost variance is negative then the project is over budget.

Schedule Variance (SV):

• Schedule variance basically related with the scheduled time for the project.
• Schedule variance is the measurement of deviation of consumed time from the scheduled time.
• Scheduled Variance is calculated by taking difference between Earned Value and Planned Value.
• If schedule variance is negative then the project is behind schedule.
• If the schedule variance is positive then the project is ahead of schedule.
• If the schedule variance is zero then the project is on schedule.