Earned Value Management is a good method for identifying schedule and cost variances. Table 7.1 summarizes the key elements of Earned Value Management.
Earned value takes the planned value, or what you planned to do and how much that planned activity costs, and matches it against the actual costs, or what actually got done. These two metrics (measurements of value) provide a wealth of information about whether the project tasks are taking longer than they should (schedule variance, or SV), or whether they are actually requiring more work effort to complete (cost variance, or CV). The combination of the two provides you with the earned value. Budget at completion (BAC) and estimate at completion (EAC) are both metrics that help you determine whether your project will be on budget or whether you will need more money and time to complete the project. These metrics are used in performance reporting to help identify whether corrective action needs to take place.
Many of the project management software tools, such as Microsoft Project, include these calculations for you as features.
The formulas are key to actual performance reporting, and some questions on the exam require you to know the differences between them.