Purchase Price Variance!!

Oracle ebusiness suite>Oracle SCM > Oracle Purchasing

Question of the Day!!  

                

Module: Oracle Purchasing

No.:  What is Purchase Price Variance?

Ans: 

The purchase price variance is calculated as the quantity received multiplied by the difference between the purchase order price and the standard cost.

The purchase price variance is the difference between the actual price paid to buy an item and its standard price, multiplied by the actual number of units purchased. The formula is:

(Actual price - Standard price) x Actual quantity = Purchase price variance

Purchase Price Variance Report

The Purchase Price Variance Report shows the variance between the purchase price on the purchase order and standard cost for all items you receive and deliver into inventory and work in process. Inventory records purchase price variance on delivery into a subinventory. Work in Process records purchase price variance on delivery into a job or repetitive schedule. For internal requisitions, the purchase order ship to location is associated with the organization in the Customers window

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