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Cost Variance

Cost Variance (CV)

EVM Terms Reviewed by forProject Technology - updated Oct 2026
Quick definition: Cost Variance (CV) is the difference between Earned Value, or Budgeted Cost for Work Performed (BCWP), and Actual Cost of Work Performed (ACWP). It is a measure of cost performance.

CV = BCWP - ACWP. It can be calculated for the current period or cumulative to date. A negative CV means actual cost is greater than the value earned (unfavorable cost performance). A positive CV means actual cost is less than the value earned (favorable cost performance).

What this means for you

CV translates cost performance into an actual amount rather than a ratio, making it easy to see the real size of a cost problem. Tracking CV from period to period helps show whether an issue is growing, shrinking, or holding steady.

Also known as
N/A
Used in
Cost Performance Index; Variance Analysis Report

FAQ

Is a negative Cost Variance always a serious problem?
Not necessarily. A small negative CV early on may be minor. A large or worsening negative CV over several periods is a warning sign. Thresholds are often set to define what a "significant" variance means.
How is CV different from Cost Performance Index (CPI)?
CV shows the gap between Earned Value and Actual Cost as an amount, in units such as Hours or Currency. CPI shows the same relationship as a ratio. Both come from the same underlying numbers.
Definition maintained by forProject Technology.
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