In the course I learned that cost variance is a measure used to assess the financial performance of a project. It compares the budgeted amount of work performed such as planned value vs the actual cost incurred during the project, basically comparing actual cost to planned cost. Professor Nozick mentioned that if the variance between plan value and actual cost become significant, it could mean that either we are under budget and the team has done more work than we have spent money or if we are over budget, then the project has cost more money than anticipated. Therefore, the project manager can then review the financial performance and implement corrective actions as needed. In this example to calculate the cost variance for resource A to find the difference between the planned cost and the actual cost. I would look at resource A which has a planned cost of $$5000$ per period for $7$ periods, then I would calculate $$5,000$ x $7=$$$35,000$ which is the $($controlled cost$).$ Then if the actual cost was $$6,000$ per period for $5$ periods, I would also calculate $$6,000$ x $5=$$$30,000$ which is the $($actual cost$).$ Then I would take $$35,000($controlled cost$)-$ $$30,000($actual cost$)=$$$5,000$ to get the $($cost variance$)$ which is less than the plan cost originally budgeted. To forecast the total cost at completion using Method $1,$ I would look at the following nodes under $($resource A$)$ which cost variance is $$5,000.$ And resource B has a planned cost of $$3,000$ per period of use, therefore would no additional expenses. So$,$ for example node $1-2$ is $$5,000$ x $9$ periods $=$$$45,000,$ node $1-4$ is $$5,000$ x $2$ periods $=$$$10,000,$ node $3-6$ is finished two periods ahead of schedule, node $4-5$ is completed as scheduled, node $5-6$ resource A is $$5,000$ x $9$ periods$=$$$45,000$ and the actual cost for resource A is $$30,000.$ Therefore, the new forecasted total cost at completion if I use Method $1$ is $$30,000+$ $$45,000+$$$10,000+$$$45,000=$$$130,000.$ To forecast the total cost at completion using Method $2,$ I would calculate by dividing $$35,000($controlled cost$)/$ $$30,000($actual cost$)=1\mathrm{.}166$ to calculate the cost performance index. Now I would need to sum up the total plan cost for resource A which would be $$45,000($node $1-2)+$$$10,000($node $1-4)+$$$35,000($controlled cost$)+$$$45,000($node $5-6)=135,000/1\mathrm{.}166($cost performance index$)=115,714.$ Therefore, the new forecasted total cost at completion if I use Method $2$ is $$115,714.$ Overall, for this project the cost variance is $$5,000.$ Then the new forecasted total cost at completion if I use Method $1$ would be $$130,000$ but if I use Method $2,$ the new forecasted total cost at completion would be $$115,714.$