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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。

A positive PPV means the goods cost more than you estimated, and the cost of goods has increased. A negative PPV means the goods cost less than your estimate, and the business saved money.

PPV, also known as purchase price variance, is a term used in procurement to refer to the difference between the market rate of a bought item and its actual price.

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