CompTIA Project+ Practice Test

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Prepare for the CompTIA Project+ Test with our curated quizzes featuring multiple-choice questions and detailed explanations. Boost your exam readiness and gain confidence to pass with ease!

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If a project has an earned value of $80,000 and actual costs of $90,000, what is the cost variance?

- $5,000
- $10,000
+ $10,000
+ $170,000

The correct answer is: - $10,000

To determine the cost variance in a project, the formula used is: Cost Variance (CV) = Earned Value (EV) - Actual Costs (AC). In this scenario, the earned value is $80,000 and the actual costs are $90,000. Plugging these numbers into the formula gives us: CV = $80,000 (Earned Value) - $90,000 (Actual Costs) CV = -$10,000 Thus, the cost variance is -$10,000, which indicates that the project is over budget by that amount. A negative cost variance means that the actual costs exceed the earned value, reflecting poor performance against the budget. Understanding cost variance is crucial for project managers as it provides insight into the financial health of the project, allowing them to take corrective actions if necessary.