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What is Cost Variance in Project Management?

1 min read
Artem Gurnov
Artem Gurnov Director of Account Development, Wrike
See Wrike for PMO

What is Cost Variance in Project Management?

Cost variance is the process of evaluating the financial performance of your project. Cost variance compares your budget that was set before the project started and what was spent. This is calculated by finding the difference between BCWP (Budgeted Cost of Work Performed) and ACWP (Actual Cost of Work Performed). The ideal cost variance is when your ACWP matches your BCWP; however, this is almost impossible to achieve. Cost variances can be positive or negative, depending on how closely your ACWP matches up to your BCWP. The purpose of knowing your cost variance is to help you track your finances as your project progresses.

Further reading:


Advanced Terminology 5 questions
What Is Change Management in Project Management? What Is Cost-Benefit Analysis in Project Management? What is Cost Control in Project Management? What is Cost Management in Project Management? What is Cost Variance in Project Management?
Artem Gurnov

Artem is a Director of Account Development at Wrike. He previously held the role of Project Manager, overseeing a team of customer success managers (CSMs). Over the years of building teams and scaling business processes, he has successfully deployed multiple projects, from automating client outreach to setting up work prioritization tools for sales reps and CSMs.

#cost variance #project management #bcwp #acwp #project budget