Purchase Price Variance Calculator
Calculate Purchase Price Variance step by step: (actual price − standard price) × quantity purchased.
In short
Formula: PPV = (actual price − standard price) × quantity purchased. Positive = unfavourable.
What this calculator does
Calculate Purchase Price Variance step by step: (actual price − standard price) × quantity purchased. Worked example, questions and limitations included.
Use it to turn Currency (symbol only, never converted), Standard (budgeted) unit price, Actual unit price, Quantity purchased into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this procurement calculation.
Inputs and what they mean
- Currency (symbol only, never converted)
- — choice value.
- Standard (budgeted) unit price
- — number value.
- Actual unit price
- — number value.
- Quantity purchased
- — number value.
How to use it
- Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
- Check the breakdown to see every intermediate step.
- Read the limitations before relying on the result.
Formula
Standard-costing price variance (OpenStax Managerial Accounting; ASCM dictionary).
Sign convention: positive means you paid more than standard.
Use quantity purchased, not quantity used.
PPV = (actual price − standard price) × quantity purchased. Positive = unfavourable.
Inputs used: Currency (symbol only, never converted), Standard (budgeted) unit price, Actual unit price, Quantity purchased.
Worked example
Raw material
- 0.60 × 5,000 = $3,000 unfavourable.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
- Single item.
- No currency effects.
- Standard must be set beforehand.
- Results are planning estimates built only from the figures you enter. No prices, rates, demand patterns or service levels are built in, and the results are not supplier quotes or carrier rates.
- The result depends on the values you enter for this purchase price variance calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Common questions
Why is positive bad?
Many procurement teams report it this way; some accounting texts flip the sign. The status line removes any doubt.
Is a favourable PPV always good?
Not if it came from buying in bulk you don't need or lower quality. Check the formula, example, and limitations on this page before using the result for a real procurement decision.
Where does the standard price come from?
Your budget or standard cost set at the start of the period. Check the formula, example, and limitations on this page before using the result for a real procurement decision.
How do I use the Purchase Price Variance Calculator?
Enter the required values for Currency (symbol only, never converted), Standard (budgeted) unit price, Actual unit price, Quantity purchased. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.
What formula does the Purchase Price Variance Calculator use?
PPV = (actual price − standard price) × quantity purchased. Positive = unfavourable. The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.
Can the Purchase Price Variance Calculator be used for exact decisions?
Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.
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