What are the calculations of Purchase Price Variance?

[accounting lads]

Purchase Price Variance is calculated by using the formula:
PPV = [ (Standard Price- Actual Price )] x Quantity purchased
In the example, the actual price paid of a component amount to 12 dollars, the standard price is 10 dollars, and the number of units ordered is 1000, this means:
PPV = (10 12) 1,000 = -2,000
This presents a negative variance of 2,000. The estimating of PPV allows companies to know when and where they overpaid or underpaid so that further decision on the procurement and pricing strategies can be done accordingly.

Source: https://accountinglads.com/purchase-price-variance/

[malayum123]

​DigitalsetGo, established in 2010, is an award-winning Digital marketing agency Dubai, UAE. Specializing in services such as social media marketing, search engine optimization (SEO), pay-per-click (PPC) advertising, content marketing, web and mobile app development, and branding, the agency focuses on enhancing clients’ online presence and connecting them with global audiences., DigitalsetGo has been instrumental in propelling diverse business ideas into the digital realm, crafting captivating designs and customer-centric strategies

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