According to the PMBOK® Guide, specifically the Control Costs process, Earned Value Analysis (EVA) is the standard method used to assess project performance and progress.

Why Choice D is correct: To calculate Cost Variance (CV), you must have the Actual Cost (AC).

The Formula: Cost Variance is calculated using the formula:

$$CV = EV - AC$$

Components:

EV (Earned Value): The value of the work actually performed expressed in terms of the approved budget.

AC (Actual Cost): The total cost actually incurred and recorded in accomplishing work performed for an activity or WBS component.

Significance: You cannot determine if you are over or under budget without knowing exactly how much money has been spent (Actual Cost). A positive CV indicates the project is under budget, while a negative CV indicates it is over budget.

Analysis of other options:

A (Contingency analysis): This is used to determine the amount of management or contingency reserves needed for a project based on risk. It is a planning and risk management tool, not a performance measurement tool for calculating current variance.

B (Review lessons learned): Historical data from similar projects is used during the Estimate Costs phase (Analogous Estimating). While it helps in setting the baseline, it cannot be used to calculate the real-time variance of the current project ' s spending.

C (Expert judgment): While expert judgment is a tool and technique for almost every process, it is used to interpret data or make estimates. Calculating variance is a mathematical exercise requiring specific data points (EV and AC) rather than an opinion-based assessment.

Key Concept:

The Project Management Institute (PMI) emphasizes that Actual Cost (AC) (Choice D) is one of the three fundamental data points (along with Planned Value and Earned Value) required for Earned Value Management. Without capturing the actual spend, a project manager lacks the " reality " component needed to measure financial performance against the Cost Baseline.