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In accounting, purchase price variance (PPV) accounts for the potential change in value of materials from when theyre purchased to when theyre recorded. Understanding PPV can help you manage a companys accounting process。

Heres the formula to calculate purchase price variance: Purchase price variance = (Actual quantity x Standard price) − Actual quantity x Actual price Related: What Is PPV in Accounting? (How to Record It in Your Books)

Explore What is PPV?, learn what causes price variances, discover why organisations use PPV, find out how to calculate it and see some example calculations.

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