Question

You asked one of your team members about the schedule variance (SV) for one of her key deliverables. She mentioned that she is behind schedule but there would not be any cost variance. Which of the following is NOT true in this case

Answer 1

Where there is a negative schedule variance (SV), the project is said to be behind schedule

Where there is a negative cost variance (CV) the project is said to be over budget

Explanation:

Schedule variance is found by subtracting the cost of work scheduled from the cost of performed work

It is given by;

Schedule variance (SV) = Cost of performed work - Cost of work scheduled

or

Schedule variance (SV) = BCWP - BCWS

Where

BCWP = Budgeted Cost of Work Performed

BCWS = Budgeted Cost of Work Scheduled

Schedule variance (SV) = Earned Value (EV) - Planned Value (PV)

Where there is a negative schedule variance, the project is said to be behind schedule.

Cost variance (CV) is given by;

Cost variance is found by subtracting the actual cost (AC) of a project from the expected cost (EC) of the project.

CV = EV - AC = EC - AC

Where there is a negative cost variance the project is said to be over budget.