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George is the project manager of the NHQ Project and has a budget of $778,000. The project is scheduled to last for one year with an equal amount of work completed each quarter. The second quarter of the project has ended and George has spent $325,000 but has only finished forty percent of the project. Management needs a variance report for the project schedule. What value should George report in this instance?
A. -$13,800
B. $-34,500
C. .96
D. -$77,800
Answer: D
Schedule variance (SV) is a measure of schedule performance on a project. The variance notifies that the schedule is ahead or behind what was planned for this period in time. The schedule variance is calculated based on the following formula: SV = Earned Value (EV) - Planned Value (PV) If the resulting schedule is negative, it indicates that the project is behind schedule. A value greater than 0 shows that the project is ahead of the planned schedule. A value of 0 indicates that the project is right on target. The earned value in this instance is forty percent of the project budget, $778,000, and the planned value is $398,000 because George is to be fifty percent done at the end of the second quarter, as the work is spread evenly across all quarters. The schedule variance is -$77,800 for the project. Answer option A is incorrect. .96 represents the cost performance index. Answer option C is incorrect. -$34,500 represents the project's variance at completion if the project continues as is. Answer option D is incorrect. -$13,800 is the cost variance for the project.

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