Cost Variance (CV) Calculator
Calculate Cost Variance (CV) to quantify whether your project is under or over budget for the work completed.
CV = EV − ACInterpretation Guide
- CV > 0Under budget.
- CV = 0On budget.
- CV < 0Over budget.
Example
EV $80,000 and AC $95,000 → CV = −$15,000 (cost overrun of $15k for work completed).
Real-world use cases
- Monthly cost reviews
- Change-control packages
- Forecast triangulation
Common mistakes
- Excluding committed costs from AC
- Treating one-time variances as a trend
Professional tips
- Combine with CPI
- Trend CV monthly to spot drift early
Frequently asked questions
Is CV always more important than CPI?
No — CV shows magnitude in dollars, CPI shows efficiency ratio. Use both together.
What this tool does
Calculate Cost Variance (CV) to quantify whether your project is under or over budget for the work completed.
It applies the standard formula CV = EV − AC so planners, schedulers and PMOs get a defensible number they can put in front of a steering committee.
Looking for the underlying terminology? Open the PM Glossary or the PM Cheat Sheet for quick references on EVM, scheduling and risk terms.
When to use it
- Monthly cost reviews
- Change-control packages
- Forecast triangulation
Typical owners: project managers, planning engineers, project controls leads and PMO analysts running weekly or monthly performance reviews on EPC, infrastructure, IT and construction projects.
How to interpret the result
Treat the number as a signal, not a verdict. Read it together with the trend over the last 3–6 reporting periods, the critical-path status, and the risk register before you change the plan.
- Compare against the baseline, not against another project.
- Investigate the drivers behind the value before reporting it up.
- Pair it with at least one complementary KPI (cost, schedule, risk or quality).
Worked example
EV $80,000 and AC $95,000 → CV = −$15,000 (cost overrun of $15k for work completed).
In a real project review, document the inputs, the resulting value, the interpretation, and the corrective action you committed to. That audit trail is what turns a calculator output into a controls decision.
In-depth guide: Cost Variance (CV) Calculator
Cost Variance (CV) is the dollar-denominated companion to CPI: CV = EV − AC. A negative CV means you spent more cash than the value of work you produced; a positive CV means the opposite. Where CPI tells you efficiency as a ratio, CV tells you the actual cash gap in dollars that has to come from somewhere — contingency, scope reduction, or additional funding.
On cost-reimbursable contracts, CV is the figure that flows directly into the monthly invoice reconciliation. On lump-sum contracts, it drives the contractor's margin reporting. Either way, it is the number that finance and procurement leaders care about more than any other EVM metric.
Mature project controls teams report CV in three flavours every month: period CV (this month only), cumulative CV (project to date), and forecast VAC (where CV will land at completion). The three together tell the full story of cost performance and its trajectory.
When to use it (and when not to)
Use CV in any context where dollar magnitudes matter more than ratios: invoice reconciliation, change-control packages, contingency drawdown requests, contract-claim quantification, and audit defence.
Avoid CV as a stand-alone metric on projects with very different scope sizes inside the same portfolio. A −$50k CV on a $500k project is critical; the same CV on a $50M project is noise. Always normalise to %-of-EV for cross-project comparisons.
Related KPIs to read alongside
Pair CV with CPI (efficiency ratio), VAC (forecast variance at completion), SV (the schedule equivalent), and the commitment-adjusted CV* = EV − (AC + Open Commitments). For contract management also track CV%-of-EV as a normalised cross-project indicator.
Worked example — refinery turnaround
A planned 28-day refinery turnaround has a BAC of $42M. At day 14 (the half-way data date), EV = $19.5M (46% of scope earned) and AC = $23.2M.
CV = 19.5 − 23.2 = −$3.7M. As a percentage of EV that is −19% — well past the −10% material-overrun threshold. CPI in parallel is 0.84, confirming the same picture from the efficiency side.
The turnaround director burns $3.5M from the $5M management reserve to cover the overrun, accelerates the remaining critical-path heat-exchanger tie-ins with a second crew, and notifies the operations VP that the cumulative VAC forecast is now $48–50M instead of $42M. The CV is recomputed daily for the remainder of the turnaround so the recovery curve is visible in real time.
Decision table
| Signal | What it means | Recommended action |
|---|---|---|
| CV ≥ 0 | Under budget for work completed. | Verify EV is not over-claimed; assess contingency release. |
| −5% of EV ≤ CV < 0 | Minor overrun within normal variance. | Monitor; no action required unless trend worsens. |
| −10% of EV ≤ CV < −5% | Material overrun. | Drill into top cost accounts; revise EAC and VAC. |
| CV < −10% of EV | Significant overrun. | Formal change control; draw on management reserve; brief sponsor. |
Common pitfalls in the field
- Mixing committed and paid AC. AC should include both invoiced and accrued costs at the data date, not just cash paid. A common error is reporting CV against cash-only AC, which understates the overrun by 1–3 months of commitments.
- Comparing CV across periods without normalising for scope. If scope changes are absorbed into the baseline via change orders, the CV should be computed against the current baseline (not the original), otherwise you are double-counting the change.
- Reporting only cumulative CV. The period CV is the leading indicator — a deteriorating period CV is usually visible 1–2 months before the cumulative CV crosses the alert threshold.
Learn more on PMMilestone
Continue exploring
Upgrade to Enterprise-Level Project Intelligence
Discover the Elite Project Controls System — a professional intelligence framework for modern project controls, forecasting, executive reporting, AI PM workflows and risk management.
- ★Executive-grade KPI frameworks
- ★AI-powered project workflows
- ★Forecasting & risk intelligence
- ★PMO-ready reporting templates