Skip to content
ENExplore Calculators

Purchase Price Variance Calculator

Work out purchase price variance instantly with clear inputs, formula shown and shareable results.

About Purchase Price Variance Calculator

Purchase price variance values the difference between standard and actual price at the quantity actually bought, and it is the primary measure of purchasing performance. Separating the volume variance keeps demand changes out of the purchasing measure.

Formulas

Purchase price variance

PPV = (Standard price - Actual price) x Quantity purchased

Volume variance

Volume variance = (Budgeted quantity - Actual quantity) x Standard price

Worked example

With the default values below, Purchase Price Variance Calculator returns Purchase price variance of -$576,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Standard or contracted price
680
Actual price paid
712
Quantity purchased
18,000
Budgeted quantity
16,000

Results

Purchase price variance
-$576,000.00
Variance per unit
-$32.00
Price variance as % of standard
4.706%
Volume variance at standard price
-$1,360,000.00

Step by step

  1. 1Values used
  2. 2Purchase price variance
  3. 3Volume variance
  4. 4Purchase price variance= -576,000.00
  5. 5Variance per unit= -32.00
  6. 6Price variance as % of standard= 4.706
  7. 7Volume variance at standard price= -1,360,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Is a positive PPV always good?

Not if it came from buying lower-grade material or a larger quantity than needed. Read it alongside quality rejection and inventory data.

Who owns the variance?

Purchasing owns the price element; the requisitioning function owns the volume element. Splitting them prevents unproductive argument.

Related Calculators

Purchase Price Variance Calculator | Calcrivo