Cost Variance is a financial metric that measures the difference between the budgeted cost of a project and the actual cost incurred. It helps project managers understand whether they are spending more or less than planned. A positive cost variance indicates that the project is under budget, while a negative cost variance shows overspending. By analyzing Cost Variance, organizations can make informed decisions about resource allocation and project adjustments. This metric is essential for maintaining financial control and ensuring that projects are completed within their allocated budgets, ultimately contributing to overall project success.