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Cost Variance (CV) = BCWP â ACWP. 1  The formula mentioned above gives the variance in terms of cost. 2  Positive CV indicates the project is under-budget. 3  Negative CV indicates the project is over-budget.
The flexible budget variance is the difference between any line-item in the flexible budget and the corresponding line-item from the statement of actual results. The following steps are used to prepare a flexible budget: 1. Determine the budgeted variable cost per unit of output.Also determine the budgeted sales price per unit of output, if the entity to which the budget applies generates revenue (e.g., the retailer or the hospital).he following steps are used to prepare a flexible budget: 1. Determine the budgeted variable cost per unit of output. Also determine the budgeted sales price per unit of output, if the entity to which the budget applies generates revenue (e.g., the retailer or the hospital).