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In this article, we answer What is PPV?, outline what causes variances in the purchase price of products and services, discuss why organisations use PPV, explain how to calculate it and review some examples.

In accounting, purchase price variance (PPV) accounts for the potential change in value of materials from when theyre purchased to when theyre recorded. Understanding PPV can help you manage a companys accounting process。

Variance analysis can help companies manage projects, productions or operational expenses by monitoring planned versus actual costs. Creating an effective analysis can help businesses maintain and improve operations.

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