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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. Uwhat is ppvnderstanding PPV can help you manage a companys accounting process。

Related: What Is PPV in Accounting? (How to Record It in Your Books) How does budget variance analysis help with forecasting? Forecasting refers to the process of using data to predict financial performance. You can use budget to actual variance analysis to create more accurate predictions.

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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