PMP Cost Variance (CV) Practice Question
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 planned value (PV) is $150,000, 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?
⚠ Common exam trap
The trap is sign confusion — candidates must remember that negative CV means over budget and negative SV means behind schedule, and avoid mixing up which variance maps to which condition.
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 (negative means over budget). SV = EV − PV = $120,000 − $150,000 = −$30,000 (negative means behind schedule). Both variances are negative, so the project is over budget and behind schedule.
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
CV is EV minus AC, giving zero, so the project is on budget, not over; SV is EV minus PV, giving minus 30,000, so it is behind schedule. It tempts because negative SV is often paired with overspending, yet here AC equals PV exactly.
- ✗
The project is under budget and ahead of schedule.
Why it's wrong here
CV is EV minus AC ($120,000 − $150,000 = −$30,000) and SV is EV minus PV ($120,000 − $150,000 = −$30,000); both negative, so the project is over budget and behind schedule. The option is tempting because positive variances would signal this healthy state.
- ✗
The project is under budget and behind schedule.
Why it's wrong here
CV equals EV minus AC, which is zero, so the project is on budget rather than under; SV is negative, confirming it is behind schedule. It tempts because the negative schedule variance correctly signals delay, but the cost half of the statement misreads a zero variance.
- ✓
The project is over budget and behind schedule.
Why this is correct
CV equals EV minus AC, $120,000 minus $150,000, a negative $30,000, so the project is over budget. SV equals EV minus PV, $120,000 minus $150,000, also negative $30,000, confirming it is behind schedule despite actual spending matching the plan.
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Last reviewed September 2026 · checked against the official PMI exam blueprint
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.