CAPM (Certified Associate in Project Management) Practice Exam

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What does a negative Cost Variance (CV) indicate?

  1. Costs are exactly as budgeted

  2. Costs are overrun

  3. Costs are below budget

  4. The project is behind schedule

The correct answer is: Costs are overrun

A negative Cost Variance (CV) indicates that costs are overrun. In other words, the actual costs incurred are higher than what was budgeted for the project. This can be problematic as it means that the project is spending more money than planned, which can impact the overall budget and profitability of the project. Option A is incorrect because a negative CV does not mean costs are exactly as budgeted. Option C is incorrect as a negative CV does not indicate costs are below budget. Option D is incorrect as a negative CV is related to costs rather than the project schedule.

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