Question

You are a project manager for an organizational restructuring project with a team of 7 consultants. The goal of the current phase is to develop 105 job descriptions within 7 business days. That means, the goal is to develop 15 job descriptions each day. Based on the burden rate of your consultants, it costs $100 to develop one job description. At the end of the 4th day, your team has worked the equivalent of $5,500 to develop 45 job descriptions.

What is the schedule variance?

A) $500.
B) $1,500.
C) $2,000.
D) $2,500.

Answer 1

The schedule variance for the project is calculated by subtracting the planned value (PV) from the earned value (EV). By the end of day 4, the team is behind schedule with a schedule variance of -$1,500 (B).

Step-by-step explanation:

To calculate the schedule variance for the project, we need to assess the progress of work completed against the planned schedule. By the end of the 4th day, the team was expected to have completed 60 job descriptions (15 job descriptions per day times 4 days). The cost of developing each job description is $100, so the planned value (PV) by day 4 would be $6,000 (60 job descriptions times $100 each).

The actual cost (AC) of the work performed is given as $5,500, but the team has only completed 45 job descriptions. Therefore, the earned value (EV), which is the value of work actually performed, is $4,500 (45 job descriptions times $100 each).

The schedule variance (SV) is calculated as EV - PV. Therefore, SV = $4,500 (EV) - $6,000 (PV), which equals -$1,500. Hence, option B) $1,500 is the correct schedule variance, indicating that the project is behind schedule.