A project manager needs to assess the budget performance by comparing the value of work performed to the actual costs incurred. Which calculation should they use?
Subtract Earned Value from Actual Cost (AC - EV)
Subtract Planned Value from Earned Value (EV - PV)
Subtract Actual Cost from Budget at Completion (BAC - AC)
To assess budget performance by comparing the value of work performed to actual costs, the project manager should calculate the Cost Variance using the formula: Cost Variance = Earned Value (EV) minus Actual Cost (AC). This calculation shows whether the project is under or over budget based on the work completed and the money spent.
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What is Earned Value (EV) in project management?
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What does Actual Cost (AC) refer to?
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What is Cost Variance (CV) and why is it important?
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Predictive, Plan-Based Methodologies
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