Project managers often use cost variance to track where their actual costs stand compared to their budget. Here are some example of cost variance in relation to specific costs:
Many industries use cost variance in a variety of ways, from reports to forecasts, depending on what they're trying to achieve. It's a way to show how an expense line item, project or any budget is performing financially. The technical definition is the difference between the Budgeted Cost of Work Performed (BCWP) and the Actual Cost of Work Performed (ACWP). Cost variance is the difference between the amount you budget for a project and the actual amount you spend completing the project.
