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Purchase price variance calculator
Enter the standard price, the price you actually paid and the quantity. You get the variance in money and as a percent of standard.
Purchase price variance is the actual price minus the standard price, multiplied by the quantity bought. At the default numbers it is USD 11,200, which is unfavorable.
Written by Procurement VMS Editorial Team · Reviewed by Michael, Procurement Advisor Expert · Updated
Your numbers
The boxes start with an example so you can see how it works. Replace them with your own figures.
Your result
The price paid was above standard, so the variance is unfavorable. You spent USD 11,200 more than planned. Find out whether the cause was the market, a change of supplier or a missed contract price.
| Variance per unit | USD 1.40 |
|---|---|
| Purchase price variance | USD 11,200 |
| Variance as a share of standard | 5.6% |
| Planned spend | USD 200,000 |
| Actual spend | USD 211,200 |
The currency box changes the label only. Enter amounts in the currency you choose.
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- PDF guide with the formula, a worked example and a checklist of what to enter
- Excel model with live formulas, so your own numbers recalculate at once
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The files open with the example numbers from the page. Type yours over the blue cells in the Excel file. The calculator on this page is free to use without a form.
How the purchase price variance calculator works
The formula
Purchase price variance = (actual price - standard price) x quantity purchased.
Purchase price variance shows how far buying performance strays from the plan. A positive figure means you paid more than the standard, and a negative one means you paid less.
On its own the figure does not say why. Break it down by supplier, by item and by buyer, then look for the cause: market movement, off-contract buying, a missed discount or a bad standard.
The example numbers are illustrative and are not benchmarks. Use your own data for any decision.
How to use it with your own data
- Take the standard price from your budget or costing sheet.
- Use the invoice price, with any rebates that apply to this purchase.
- Run it per item, then add the results for a supplier or category.
Mistakes that skew the answer
Using a stale standard
If the standard has not been updated for a year, the variance shows the market, not the buyer.
Mixing units of measure
A price per kilogram against a price per ton gives nonsense. Convert first.
Ignoring volume effects
A smaller order may carry a higher unit price. Read variance next to quantity.
What to do with the result
Use the result to find off-contract buying with the maverick spend guide, and set the next standard with data from your spend analysis template. Report it with your other savings on the procurement KPI dashboard.
Questions about the purchase price variance calculator
What is purchase price variance?
It is the difference between the price you paid and the standard or planned price, multiplied by the quantity.
What does an unfavorable variance mean?
You paid more than the standard. It can come from market price rises, supplier changes or buying outside agreed contracts.
How often should I measure it?
Monthly by category is a common rhythm, with a closer look at the largest items.
Is PPV the same as price variance?
Yes. Purchase price variance and price variance are used for the same measure in most procurement reports.