What is Cost Variance?
Difference between budgeted and actual cost of work done.
How to calculate it
Calculate Cost Variance as: Earned value − Actual cost. Pull the inputs from your connected data and track the trend over time in your dashboard.
Examples
Example 1
Earned value $90k - actual cost $85k = +$5k, under budget for work done.
Example 2
Earned value of $90k against actual cost of $85k -> +$5k cost variance, meaning the team delivered the work for less than budgeted.
Why it matters
Cost variance is the difference between the budgeted and actual cost of work performed, in earned-value terms, and signals budget health. It distinguishes overspending from simply doing more work, which a raw budget-versus-actual comparison cannot. Mixing committed and spent costs distorts it.
Benchmark context
Zero or positive means on or under budget for the work done; a growing negative variance indicates cost overruns.
Common pitfalls
Mixing committed and spent costs.
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