Purchase Price Variance Calculator
Compare an actual purchase price with your standard price and quantify the cost difference on the purchased quantity.
Price variance (+ unfavorable)Example$500.00
- Actual purchase cost
- $5,500
- Standard purchase cost
- $5,000
How to calculate purchase price variance
Purchase price variance = (actual unit price − standard unit price) × quantity purchased
Positive is unfavorable and negative is favorable. This purchase-based model does not measure usage variance or inventory valuation adjustments.
Worked example
An illustrative scenario. “Reset to example” restores it in the calculator.
- Standard unit price
- $10
- Actual unit price
- $11
- Quantity purchased
- 500 units
Price variance (+ unfavorable): $500.00
Purchase Price Variance FAQ
Does a favorable price variance always mean a better purchase?
No. Lower quality, higher waste, larger minimum orders or freight can offset the saving. Keep the same included-cost definition for both unit prices.
Guides for this calculation
Build context around the numbers with worked examples from our guides.
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