Supply Chain & Procurement worked example

Purchase Price Variance with actual price paid per unit of 63 units: a worked example in supply chain & procurement

Here is what the math looks like when conditions slip. We hold every other input steady and drop actual price paid per unit to 63 units, then walk the calculation through step by step. Calculate purchase price variance from standard spend and actual spend.

The inputs for this scenario

  • Actual price paid per unit: 63 units (the input this scenario stresses; the baseline uses 125)
  • Standard or quoted price per unit: 100 units (held at the documented default)
  • Standard cost reference baseline: 100 units (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Margin = gain or available amount - cost or required amount.
  • Purchase price variance margin works out to -37 % at these inputs, and this is the headline figure for the scenario.
  • Purchase price variance amount gap works out to -37 value at these inputs.
  • Available purchase price variance amount works out to 63 value at these inputs.
  • Required purchase price variance amount works out to 100 value at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where actual price paid per unit sits at 125 units and the headline result is 25 %, this scenario comes in 248% below the baseline at -37 %.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to actual price paid per unit, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. PPV alone doesn't explain the cause — a variance can come from market moves, volume changes, spec changes, or FX, so investigate before rewarding or penalizing a buyer.

Results at a glance

  • Purchase price variance margin: -37 % (headline result)
  • Purchase price variance amount gap: -37 value
  • Available purchase price variance amount: 63 value
  • Required purchase price variance amount: 100 value

Run it with your numbers

  • To rerun this with your own numbers, open the live Purchase Price Variance calculator, set actual price paid per unit to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.