Enter the total earned value and the actual cost into the calculator to determine the cost variance.
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Cost Variance Formula
The following formula is used to calculate a cost variance.
CV = EV – AC
- Where CV is the cost variance ($)
- EV is the earned value ($)
- AC is the actual cost ($)
Cost Variance Definition
A cost variance is defined as the difference between an earned value and the actual cost of a good.
Cost Variance Example
How to calculate cost variance?
- First, determine the earned value.
Determine the total budget that is estimated for the project.
- Next, determine the actual cost.
After the project is completed, analyze and calculate the actual total cost.
- Finally, calculate the cost variance.
Subtract the actual cost from the earned value to determine the cost variance.
A cost variance is the difference between a budgeted cost of a job or work and the actual cost of that job after completion.
Earned value is considered the amount of monetary value budgeted for a certain project.