CV =EV-AC ;CV= Cost Variance
Earn Value is the work done till the certain time of project in terms of $ amount. Sum of the
planned value of completed work usually denotes as EV
SV= EV-PV; SV= Schedule Variance
Performance index cost ,
Performance index schedule ,
You have to complete a project in 10 months and budget for the same is $10,000. Now, At the end of 2nd month you have spent $3,000 and you have only completed 20% of the total work.
So in this case, At the end of 2nd Month :
AC = $3,000
EV = 20% of $10,000 = $2,000
You were suppose to complete the work in $2,000 i.e. this is the value of work you have gained/done so far. But you have spent $3,000 already. That means there's a cost variance. You are not going as per the plan.
That CV is calculated as :
CV = EV - AC = $2000 - $3000 = - $1000
Hope this was helpful to you.
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