Glossary

Cost variance

Cost variance is the difference between what work should have cost and what it is costing (or forecasted to cost). Positive or negative depends on how your team signs the formula; the useful part is catching unexplained drift early.

Worked example

A hypothetical concrete package is budgeted at $900,000. Estimate at completion is now $970,000. Cost variance is $70,000 over budget on that package.

Related terms

• Estimate at completion
• Committed cost
• Billed vs complete percent

Keep reading: Why 77% of construction projects exceed budget.