CAPM Cost Variance (CV) Practice Question
A project has a cost baseline of $100,000. At the end of month 2, the planned value is $30,000, and the actual cost is $40,000. If the earned value is $25,000, what is the cost variance?
⚠ Common exam trap
Candidates often confuse cost variance with schedule variance or miscalculate by using Planned Value instead of Actual Cost. Always use EV - AC for CV.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
-$15,000
Cost variance (CV) = Earned Value (EV) - Actual Cost (AC) = $25,000 - $40,000 = -$15,000. A negative CV indicates the project is over budget. Therefore, option C is correct.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
$15,000
Why it's wrong here
Positive CV would mean under budget, but here it's over budget.
- ✗
-$10,000
Why it's wrong here
Incorrect calculation.
- ✓
-$15,000
Why this is correct
Correct calculation of CV.
- ✗
$10,000
Why it's wrong here
This is the EV minus PV? Incorrect.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CAPM practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAPM exam.