- A
The project is over budget and ahead of schedule.
Why wrong: This option is incorrect because although CV is negative (over budget), SV is negative (behind schedule), not ahead.
- B
The project is under budget and ahead of schedule.
Why wrong: This option is incorrect because CV is negative (over budget), not under budget.
- C
The project is under budget and behind schedule.
Why wrong: This option is incorrect because CV is negative (over budget), not under budget.
- D
The project is over budget and behind schedule.
This option is correct because CV = -$30,000 (over budget) and SV = -$5,000 (behind schedule).
Question 438 of 892
PMP Cost Variance (CV) Practice Question
This PMP practice question tests your understanding of process — managing technical aspects. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. A key principle to apply: cost Variance (CV). Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
You are managing a project that is currently in the execution phase. The project has a cost baseline of $500,000. At the end of month 3, the actual cost is $150,000 and the earned value is $120,000. The project manager calculates the cost variance (CV) and schedule variance (SV). What do the results indicate?
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
✓
The project is over budget and behind schedule.
CV = EV - AC = $120,000 - $150,000 = -$30,000, indicating the project is over budget. SV = EV - PV. While PV is not explicitly provided, it can be derived from the cost baseline of $500,000. Assuming a linear distribution (e.g., over 10 months), PV at month 3 is $150,000, giving SV = $120,000 - $150,000 = -$30,000, indicating behind schedule. Thus the project is over budget and behind schedule, so option D is correct.
Key principle: Cost Variance (CV)
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
The project is over budget and ahead of schedule.
Why it's wrong here
This option is incorrect because although CV is negative (over budget), SV is negative (behind schedule), not ahead.
- ✗
The project is under budget and ahead of schedule.
Why it's wrong here
This option is incorrect because CV is negative (over budget), not under budget.
- ✗
The project is under budget and behind schedule.
Why it's wrong here
This option is incorrect because CV is negative (over budget), not under budget.
- ✓
The project is over budget and behind schedule.
Why this is correct
This option is correct because CV = -$30,000 (over budget) and SV = -$5,000 (behind schedule).
Related concept
Cost Variance (CV)
Common exam traps
Common exam trap: answer the scenario, not the keyword
The key to this question is to correctly compute PV from the cost baseline and project duration. Many candidates forget to derive PV and incorrectly assume schedule performance without it.
Detailed technical explanation
How to think about this question
Treat this as a scenario question. Identify the problem, the constraint, and the best action. Then compare each option against those facts.
KKey Concepts to Remember
- Cost Variance (CV)
- Schedule Variance (SV)
- Earned Value Management (EVM)
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Cost Variance (CV)
Real-world example
How this comes up in practice
A practitioner preparing for the PMP exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Cost Variance (CV) Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Got this wrong? Here's your next step.
Review cost Variance (CV), then practise related PMP questions on the same topic to reinforce the concept.
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Process — Managing Technical Aspects — study guide chapter
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FAQ
Questions learners often ask
What does this PMP question test?
Process — Managing Technical Aspects — This question tests Process — Managing Technical Aspects — Cost Variance (CV).
What is the correct answer to this question?
The correct answer is: The project is over budget and behind schedule. — CV = EV - AC = $120,000 - $150,000 = -$30,000, indicating the project is over budget. SV = EV - PV. While PV is not explicitly provided, it can be derived from the cost baseline of $500,000. Assuming a linear distribution (e.g., over 10 months), PV at month 3 is $150,000, giving SV = $120,000 - $150,000 = -$30,000, indicating behind schedule. Thus the project is over budget and behind schedule, so option D is correct.
What should I do if I get this PMP question wrong?
Review cost Variance (CV), then practise related PMP questions on the same topic to reinforce the concept.
What is the key concept behind this question?
Cost Variance (CV)
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Last reviewed: Jun 21, 2026
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