Program Management Professional (PgMP) — Question 27

After taking over a program, a program manager reviews the program's status and discovers that stakeholders do not know how the program is performing in relation to schedule and costs. The program manager establishes earned value (EV) metrics and determines that the program has a budget of US$2.1 million, is three months into a nine-month timeline, and the planned value (PV) at the three-month point should be US$320,000. The program has spent US$350,000 and the EV is US$340,000.
Based on this information, the program manager determines which of the following?

Answer options

• A. The schedule is US$30,000 under budget
• B. The cost is US$20,000 under budget
• C. The schedule is US$10,000 over budget
• D. The cost is US$20,000 over budget

Correct answer: A

Explanation

The correct answer is A because the planned value (PV) at three months is US$320,000 and the earned value (EV) is US$340,000, indicating that the program is ahead of schedule by US$20,000. However, since the actual cost (AC) is US$350,000, the program is over budget by US$10,000. Therefore, options B, C, and D are incorrect as they misinterpret the relationship between the budget, actual cost, and earned value.