Quick Answer
The answer is that costs are higher than planned for the work performed. This is the most likely reason because cost variance analysis in project management compares earned value (EV) to actual cost (AC), and here AC of $115,000 exceeds EV of $100,000, producing a negative cost variance of -$15,000. Since the project is 15% over budget at the midpoint, the actual expenditures have outpaced the value of work completed, confirming a cost overrun rather than a schedule or scope issue. On the PMP exam, this scenario tests your ability to interpret EVM metrics and distinguish between cost variance (CV = EV - AC) and schedule variance (SV = EV - PV); a common trap is confusing a negative CV with being behind schedule, but here the schedule is also behind since EV is less than PV. A useful memory tip is to remember that cost variance is about the budget spent versus work done, so if AC is greater than EV, you are spending more for less—think “AC > EV = cost overdrive.”
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. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. 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 15% over budget at the midpoint. The earned value (EV) is $100,000, actual cost (AC) is $115,000, and planned value (PV) is $110,000. What is the most likely reason for the cost variance?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "most likely"
Why it matters: Probability qualifier — the question wants the most probable cause or outcome, not a guaranteed one. Eliminate low-probability options.
Costs are higher than planned for the work performed
AC > EV shows cost overrun.
The project is ahead of schedule
Why wrong: PV > EV indicates behind schedule.
The project is under budget
Why wrong: AC > EV shows over budget.
The scope was increased without adjusting the budget
Why wrong: Scope increase would likely increase EV proportionally.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Costs are higher than planned for the work performed
Option B is correct because AC > EV and AC > PV indicates cost overrun. Option A is wrong because EV is less than PV, indicating behind schedule, not ahead. Option C is wrong because the project is behind schedule, not ahead. Option D is wrong because scope increase would likely increase EV as well.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Costs are higher than planned for the work performed
Why this is correct
AC > EV shows cost overrun.
Clue confirmation
The clue word "most likely" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
The project is ahead of schedule
Why it's wrong here
PV > EV indicates behind schedule.
The project is under budget
Why it's wrong here
AC > EV shows over budget.
The scope was increased without adjusting the budget
Why it's wrong here
Scope increase would likely increase EV proportionally.
Common exam traps
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Trap categories for this question
Command / output trap
AC > EV shows over budget.
Detailed technical explanation
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
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. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Identify which PMP exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Process — Managing Technical Aspects — study guide chapter
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FAQ
Process — Managing Technical Aspects — This question tests Process — Managing Technical Aspects — Read the scenario before looking for a memorised answer..
The correct answer is: Costs are higher than planned for the work performed — Option B is correct because AC > EV and AC > PV indicates cost overrun. Option A is wrong because EV is less than PV, indicating behind schedule, not ahead. Option C is wrong because the project is behind schedule, not ahead. Option D is wrong because scope increase would likely increase EV as well.
Identify which PMP exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Yes — watch for: "most likely". Probability qualifier — the question wants the most probable cause or outcome, not a guaranteed one. Eliminate low-probability options.
Read the scenario before looking for a memorised answer.
About these practice questions
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Same concept, more angles
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. Your project is running 15% over budget at the midpoint. The cost variance is due to higher-than-expected material costs. What is the BEST action?
mediumWhy B: The PM should analyze the variance, determine root cause, and develop corrective actions, then communicate to stakeholders.
Variation 2. You are managing a project that is running 15% over budget at the midpoint. The variance is due to higher-than-expected material costs. The sponsor is concerned about cost overruns. What should you do FIRST?
mediumWhy C: The PM should first analyze the root cause of the cost variance and determine if the trend is likely to continue. Based on this analysis, the PM can develop a revised estimate at completion (EAC) and communicate it to the sponsor. Simply asking for more budget or reducing scope without analysis is premature.
Last reviewed: Jun 21, 2026
This PMP 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 PMP exam.
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