Purchase Price Variance (PPV) is a term commonly used in the accounting and finance fields. It is a measure of the difference between the expected cost of a purchase and the actual cost of the purchase. It is a measure of the difference in the price of a purchase transaction, between what is expected and what is actually paid. It is used to identify the costs associated with purchasing materials, supplies, and other items.
The PPV typically includes the costs associated with material acquisition, overhead, and any other related expenses. It may also include the cost of labor involved in the purchase process. PPV is often used as a comparison between actual and expected costs, and to identify areas where savings can be made. It is also used to calculate the profitability of a purchase and to evaluate whether an organization is getting the best value for its money.