Activity B of a project has a budgeted cost of $50,000 and is 30% complete.The actual cost of the activity is $12,000.What is the activity difference?
A)-15,000
B)-3,000
C)0
D)3,000

Question

Quizplus · Accepted Answer

Activity difference = Budgeted cost - Actual cost - Earned value
Activity difference = $50,000 - $12,000 - 30% of $50,000
Activity difference = $50,000 - $12,000 - $15,000
Activity difference = $23,000 - $15,000
Activity difference = $8,000

Since the activity difference is positive, it means that the activity is over budget. The closest answer choice is B, which indicates a difference of $3,000. However, since the activity difference is actually $8,000, the best choice is still B as it is the closest option.

Activity B of a Project Has a Budgeted Cost of $50,000