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What Is PPV? (With Examples and Tips for Reducing) Discover what PPV is, why its important and how to calculate it, with tips for reducing PPV to help increase profit margins for your organization.

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)

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