accountinglads (1 Post bisher) | | Purchase price variance (PPV) refers to the extent between the standard cost of a material and its actual buying price. PPV is a method used by companies in order to track the efficiency of purchases along with cost control. When PPV is positive then the actual price paid was less than what was expected i.e. it was favourable; whereas a negative PPV indicates the company had paid over what it had expected i.e. unfavourable. This variation assists in findings problems such as supplier price fluctuations, level of negotiating, or market factors enabling the companies to allocate budgets, analysis of vendors, and profit margin, and control their margins.
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