All work is planned, budgeted, and scheduled in time-phased ''planned value'' increments constituting a cost and schedule measurement baseline. As work is performed, it is ''earned'' on the same basis as it was planned, in dollars or other quantifiable units such as labor hours. Planned value compared with earned value measures the dollar volume of work planned vs. the equivalent dollar volume of work accomplished. Any difference is called a schedule variance. As a result, the schedule variance shows that 35 percent of the work planned for this period was not done.
Any difference is called a cost variance.
A negative variance means more money was spent for the work accomplished than was planned. Table 3 shows the calculation of cost variance. The cost variance is 40 percent. The typical spend comparison approach, whereby contractors report actual expenditures against planned expenditures is not related to the work that was accomplished. Table 4 shows a simple comparison of planned and actual spending, which is unrelated to work performed and therefore not a useful comparison.