What is Purchase Price Variance (PPV) and How to Calculate it?
SCMDOJO
MARCH 24, 2025
The formulae for the PPV is: PPV= (Standard Price – Actual Price) *actual quantity Lets understand this with some examples: Example # 1: A FMCG company plans to purchase 20,000 units of packaging material at an estimated cost of $6 per unit, setting a total budget of $120,000. What Causes Favorable Purchase Price Variance (PPV)?
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