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Purchasing departments measure PPV when they purchase raw materials. If there is a significant price variance, it needs to be reclassified into the inventory of raw materials, inventory of work-in-progress, cost of products, and。

Read more: Cost Variance: Definition, Formula and Examples Why is PPV important? Most manufacturers agree that raw materials take up most of their running costs,。

What is Purchase Price Variance (PPV)? Companies that are selling products are either in control of the manufacturing or implementation。

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