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What Is Price Variance in Cost Accounting? Price variance is the actual unit cost of an item less its standard cost, multiplied by the quantity of actual units purchased. The standard cost...

What is PPV (Purchase Price Variance)? It is the difference between the budgeted or standard price of an item and the actual amount paid to acquire that item. Think of it as a financial reflection of how a company’s purchasing strategies perform against market price。

Purchase price variance (PPV) is the difference between the standard cost (also known as baseline price) paid on a specific 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).

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