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Purchase Price Variance (PPV) reflects the difference between the actual amount paid for a product or service and the standard or expected amount for the same. It is a crucial metric in cost accounting. This value indicates the impact of fluctuations in purchase prices on。

Purchase price variance (PPV) is the difference between the standard cost (also known as baseline price) paid on a specifppv meaning financeic item or service and the actual amount you paid to acquire it. PPV can be either favorable or unfavorable and may be tracked for specific time periods (monthly, quarterly, yearly).

Purchase Price Variance is the difference between the Actual Price paid to buy an item and the Standard Price, multiplied by the Actual Quantity of units purchased. Here is the formula: PPV = (Actual Price – Standard Price) x Actual Quantity. PPV can be used to quantify the efficiency of a company’s procurement function.

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