Example with formulas Earned Value, Cost Variance and Schedule Variance

4. Earned Value

Formula: EV = % Complete x Budget at Completion 

Earned Value estimates the amount of work done in terms of monetary value. 

It is calculated by multiplying the percentage of work completed and the project value represented by budget at completion. 

If the Budget at completion is $50,000 and 60% of the project is done, then the calculation can be made in the following way. 

50,000 x 60/100 

=$30,000 

5. Cost Variance

Formula: CV = Earned Value – Actual Cost 

Cost Variance measures the difference between actual cost and budgeted cost. This provides a good indicator of how your project is proceeding in terms of meeting the budget. If the actual costs are higher than the earned value, then it is a case for concern. 

If Actual cost incurred is $400 and the Earned Value in $450 the Cost Variance will be 

Earned Value – Actual Cost 

450 – 400 

= $50 

6. Schedule Variance 

Formula: SV = Earned Value – Planned Value 

This is a simple calculation where the earned value is subtracted from the planned value. This value measures the actual progress against the scheduled progress. 

Let’s say your project is worth $20,000 and scheduled to be completed in 4 months. 

At the end of two months your earned value (EV) should be at $10,000, which is also the planned or estimated value at the start of the project. If your earned value and planned value are same, then there is no schedule variance. If it is let’s say at $7,500 then you would calculate Schedule Variance as 

Earned Value – Planned Value  

7500 – 10000  

= -2500 

This shows that you have a negative Schedule Variance which means that the project is running behind schedule. You can also express SV as a percentage. In the above case it would be –25%