Hold up! This article is only for folks who consider themselves intermediate at PMP earned value questions and want to test their knowledge. If you’re just getting started with EVM, check out our brief overview of PMP Topics here.

Let’s do a brief review before diving into the sample questions.

## PMP Earned Value Review

**Cost & Schedule**

- Cost Variance = Earned Value – Actual Cost, or CV = EV – AC
- Cost Performance Index = CPI = EV/AC
- Schedule Variance = Earned Value – Planned Value, or SV = EV – PV
- Schedule Performance Index = SPI = EV/PV

Remember that the variance calculations require that you subtract, while the indexes require that you divide. Here is the key takeaway and best way to remember variances and indexes. Know it!

Earned Value (EV) is your key indicator. To understand cost performance, compare EV to actual costs (AC). To understand schedule performance, compare EV to planned value (PV).

For cost, compare EV to AC, because that will tell you how efficiently you are spending your money. For schedule, compare EV to PV, because that will tell you how far along you are compared to what you planned.

Some folks choose to memorize whether CPI & SPI greater or less than 1 is good or bad. We recommend that you really learn the material, rather than relying on memorization. That said, it is crucial to know some basic formulas before you interpret them. Here are some additional key formulas to know. (For all formulas, including non-EVM-related ones, visit our How to Do a PMP Brain Dump article.)

**Estimate At Completion (EAC) & Estimate To Complete (ETC)**

*Note: I like to do this one in a table format because the EAC & ETC formulas are closely related, and it is easy to complete the table by relating ETC to EAC and vice versa.*

EAC | ETC | |
---|---|---|

If there’s no variance at all | BAC | EAC - AC |

If there is variance and it is expected to continue | BAC/CPI | BAC/CPI - AC |

If there was variance, but now it’s gone | AC + BAC - EV | BAC - EV |

If your original estimates are fundamentally flawed | AC + new ETC | new bottom-up estimate |

If you are over budget and past due | [(BAC - EV) / (CPI * SPI)] + AC | [(BAC - EV) / (CPI * SPI)] |

**Additional Cost Formulas**

- (EV/BAC)*100% = % complete
- Variance at Completion = VAC = BAC – EAC
- To-Complete Performance Index (TCPI) based on BAC = (BAC – EV)/(BAC – AC)
- TCPI based on EAC = (BAC – EV)/(EAC – AC)

Depending on your particular situation, you may or may not refer to the formulas while practicing these questions. When I was studying for the PMP exam, I found it helpful to reference formulas and then wean myself off them later.

Although it is important that you practice difficult EVM questions to ensure that you thoroughly understand the concept, I encountered few, if any, difficult EVM questions on my particular PMP exam.

## Sample PMP Earned Value Questions

Given a project with the following characteristics, answer the following questions:

- You are the project manager of a project to build fancy birdhouses.
- You are to build two birdhouses a month for 12 months.
- Each birdhouse is planned to cost $100.
- Your project is scheduled to last for 12 months.
- It is the beginning of month 10.
- You have built 20 birdhouses and your CPI is .9091.

1. How is the project performing?

A. Over budget and ahead of schedule

B. Under budget and ahead of schedule

C. Over budget and behind schedule

D. Under budget and behind schedule.

2. What is the actual cost of the project right now?

A. $1800

B. $2000

C. $2200

D. $2400

3. Assuming that the COST variance experienced so far in the project will continue, how much more money will it take to complete the project?

A. $400

B. $440

C. $2800

D. $2840

4. If the variance experienced so far were to stop, what is the project’s estimate at completion?

A. $2400

B. $2440

C. $2600

D. $2800

5. What is the project’s TCPI using the project’s budget at completion?

A. .5

B. 1

C. 1.5

D. 2

6. Senior management wants to the percentage of the project that is complete. What should you report?

A. 75%

B. 83%

C. 92%

D. 95%

7. Imagine if instead of 10 months and costing $2200, the project was in month three and costing $4000. What formula might you use for BAC?

A. [(BAC – EV) / (CPI * SPI)] + AC

B. new bottom-up estimate

C. AC + new ETC

D. AC + BAC – EV

## Answers:

1. **A – Over budget & ahead of schedule.** The problem tells you that your CPI is .9091, and we know that CPI = EV/AC. Applying that, a CPI less than 1 means that we aren’t getting enough value for each dollar that we put into our project, so it is over budget. However, the project is ahead of schedule because we have built 20 birdhouses and after 9 months, we had expected to build only 2 birdhouses per month * 9 months = 18 birdhouses.

2. **C – $2200.** If you weren’t quite sure whether the project was over budget in the last question, you can use this problem to strengthen your knowledge. In this problem, we need to determine the AC. In the body of the problem, you are given the CPI and can determine the EV, so you can use the CPI formula to back out the AC. EV = 20 birdhouse & $100 per birdhouse = $2000.

- CPI = EV/AC
- .9091 = 2000/AC, so multiply both sides by AC
- AC(.9091) = 2000, so divide both side by .9091
- AC = 2200

3. **B – $440.** First, use the context of the problem to determine that you need the ETC when a variance exists and it is continuing. Based on that information, we know to use ETC = BAC/CPI – AC. We already know the CPI from the problem and AC from the solution to #2, so let’s find BAC.

- BAC = 2 birdhouses per month * 12 months * $100 per birdhouse
- BAC = $2400

- ETC = BAC/CPI – AC
- ETC = 2400/.9091 – 2200
- ETC = 440

4. **C – $2600.** A few of the EMV questions you encounter on the PMP exam will be fairly straightforward. This question is asking you for the EAC if a variance that was encountered on a project is expected to stop, so use EAC = AC + BAC – EV.

- EAC = 2200 + 2400 – 2000
- EAC = $2600

I should take a moment to point out that this problem wouldn’t be so straightforward if it were standing on its own. Based on our answers to the previous three questions, we already knew AC, BAC, and EV. The real PMP doesn’t have answers that build upon each other, so your steps to solving this problem on its on would be less straightforward. Instead you would first determine which equation to use, then calculate AC using the CPI (as in question #2), then BAC as in question #3, then EV as in question #2.

5. **D – 2.** Fortunately, PMI has to tell you which TCPI formula to use. This one says use BAC, so TCPI = (BAC – EV)/(BAC – AC) = (2400 – 2000) / (2400 – 2200) = 400/200 = 2.

6. **B – 83%.** If you have the percent complete formula in front of you, then this problem is really easy. Just plug EV & BAC into (EV/BAC)*100%, and you’re all set. If you got this problem wrong, then review this article on EV, PV, and AC.

7. **C – AC + new ETC.** It may be tempting to pick A, but remember that the EAC formula is for when a project is past due. If you find that your estimates are wildly wrong at the beginning of a project, it is best to develop a bottom-up estimate to complete and then add that to your actual costs.

Beginning your studies for the EVM portion of the exam can be challenging, especially if math isn’t your strong suit. If you easily mastered these and tougher questions, you may be ready for the Cost Management portion of the PMP exam. If you need more help, I recommend really understanding the basics of EV, PV, and AC first.

How is studying for the EVM portion of your PMP exam going? Whether it’s going great or you’re feeling terrible, please share below! We can all work together to find a solution that works for you.

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For question #3, you should specify that only cost variance is assumed to stay the same. There is variance in the schedule and the budget, so saying “variance experienced so far” is general and means to use the EAC formula that includes SPI and CPI.

You are right! Thanks for the eagle eyes, Alex. I’ll make that update.

Re- Ques 4. Variance is the measure of performance rate. So, if you want to stop variance, you have to take some measures which might affect on CPI and SPI. So, probably you have to use the other formula for EAC reflecting CPI and SPI. Your opinion please.

Thanks!! That explained it very well!! I got all the questions right!

Thanks for reading, Meli!

Thanks for your questions, good information. I got all right except 7 – I choose option B for that

Not bad! Were you able to understand the answer to 7, once you checked the explanation? 🙂

Thank you Rich. This really helped me understand. Kudos to the explanations.