Final answer:
For a level of effort control account, because the earned value always equals the budget, there will never be a cost variance as the actual costs are expected to match the earned value, resulting in a cost variance of zero.
Step-by-step explanation:
In project management, earned value management (EVM) is a technique used for measuring project performance. It integrates project scope, cost, and schedule measures to help the project management team assess progress. When we consider a level of effort (LOE) control account, the earned value (EV) is equivalent to the budgeted amount, because LOE activities do not produce discrete deliverables and are budgeted based on the passage of time rather than specific accomplishments.
To answer the question, 'because the earned value for a level of effort control account always equals the budget, which of the following statements is correct?' the correct option is: b) There will never be a cost variance. This is because, for LOE activities, EV will always match the Budgeted Cost of Work Scheduled (BCWS), which means actual costs (AC) incurred are typically equal to the EV for a given period.
Cost variance (CV) is calculated as EV minus AC. Since EV equals AC for LOE activities, CV would be zero, implying no cost variance. However, this refers only to cost variance and does not imply anything about the schedule variance (SV), which would require a comparison of EV against BCWS.