A work package has earned value of $410,000 and actual cost of $435,000. What is the cost variance?
Correct Answer
D) -$25,000
Cost variance is EV - AC = $410,000 - $435,000 = -$25,000.
Why This Is the Correct Answer
Cost variance is EV - AC = $410,000 - $435,000 = -$25,000.
Why the Other Options Are Wrong
Option A: $25,000
cost variance, choice a: $25,000 is an intermediate from the steps (Cost variance is EV - AC = 410000 - 435000 = -25000.); the calculation continues to -$25,000.
Option B: -$845,000
cost variance, choice b: -$845,000 backs into -1.94 when divided by $435,000; the accepted setup gives -0.06 on that same base.
Option C: $435,000
cost variance, choice d: $435,000 is an intermediate from the steps (Cost variance is EV - AC = 410000 - 435000 = -25000.); the calculation continues to -$25,000.
Memory Technique
Store cost variance with its last math move; nearby answers are usually unfinished versions of -$25,000.
Reference Hint
Open Construction Jobsite Management, 5th Ed. (2024); use by topic index - labor hours / productivity / earned value / job cost to confirm that Cost variance is EV - AC = $410,000 - $435,000 = -$25,000.
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