PMP Certification: What “Earned Value Basics” Really Means
Behind all the numbers, earned value (EV) is really about understanding the status of your project. On the project management professional (PMP) exam, don’t get caught up in the equations. Instead, pay attention to what the numbers are telling you. Carefully read the test question to determine the core question, and then look at the numbers to figure out the answer.
For example, if you have a question that asks:
Your BAC is $10,800, and your EV is $4,560. If your PV is $6,200 and your AC is $6,500, how far along are you in your project?
The first thing to do is determine what the question is really asking, which is for your percent completed. It’s not asking for a schedule or cost variance, and it isn’t asking for a cost performance index (CPI) or schedule performance index (SPI).
What if the question asks:
Your BAC is $10,800, and your EV is $4,560. If your PV is $6,200 and your AC is $6,500, what is your schedule status?
In this instance, you don’t need to know the budget at completion (BAC) or the actual cost (AC). Those are called “distractors” because they’re giving you information you don’t need. The only things you need to know are the EV and PV to determine your schedule status.
What if the question asks:
Your BAC is $10,800, and your EV is $4,560. If your PV is $6,200 and your AC is $6,500, will you finish on time?
In this case, you don’t have enough information to answer the question. You don’t know if there is a variance on the critical path. You don’t know whether you can crash some activities to make up time. All you know is that there is a variance in what you planned to accomplish and what you did accomplish.
To help you get through the myriad of numbers, you can think of EV terms like this:

Earned value (EV) means is the value of work you accomplished.

Planned value (PV) means is the value of work you planned on accomplishing.

Actual cost (AC) is the amount you paid for the work.
So, a schedule variance is looking for the difference between what you accomplished and what you planned to accomplish. And a cost variance is the difference between the value of what you accomplished and what you paid for it.
The next time you’re working on EV problems, see whether you can stop and for a moment and think about the questions in English, rather than math. It might help you on the exam!