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2 January, 12:52

A software development project at day 70 exhibits an actual cost of $78,000 and a scheduled cost of $84,000. The software manager estimates a value completed of $81,000. What are the cost and schedule variances and CSI? Estimate the time variance.

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  1. 2 January, 13:13
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    Answer and Explanation:

    Given:

    Actual time (AT) = 70 days

    Actual cost (AC) = $78,000

    Scheduled cost (SC) = $84,000

    Earned value (EV) = $81,000

    Computation of cost variance:

    Cost variance = Earned value - Actual cost

    Cost variance = $81,000 - $78,000

    Cost variance = $3,000

    Computation of schedule variance:

    Schedule variance = Earned value - Scheduled cost

    Schedule variance = $81,000 - $84,000

    Schedule variance = - $3,000

    Computation of Cost schedule Index (CSI):

    Cost schedule Index = EV² / (AC * SC)

    Cost schedule Index = ($81,000) ² / ($78,000 * $84,000)

    Cost schedule Index = 1.00137363

    Cost schedule Index = 1.001 (Approx)

    Computation of time variance:

    Time variance = (AT * CSI) - AT

    Time variance = (70 * 1.001) - 70

    Time variance = (70.07) - 70

    Time variance = 0.07 days
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