Price Variance Calculator

Calculate Price Variance





Formula

To calculate the Price Variance (VPM) from the actual unit cost (AC), standard cost (SC), and quantity purchased (Q):

\[ VPM = (AC - SC) \times Q \]

Where:

What is Price Variance?

The price variance is a measure that determines the difference between the actual cost of a product or service and its expected cost. It is significant as it helps identify deviations from the anticipated budget, enabling businesses to assess and control their expenses effectively.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ VPM = (12 - 10) \times 100 = 200 \]

The Price Variance is $200.

Example Calculation 2

Let's assume the following values:

Using the formula:

\[ VPM = (15 - 13) \times 50 = 100 \]

The Price Variance is $100.