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The actual cost may have been taken from an inventory layering system, such as a first-in first-out system, where the actual cost varies from the current market price by a。

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,。

PPV can be either favorable or unfavorable and may be tracked for specific time periods (monthly, quarterly, yearly). It is often reported in terms of total procurement spend. Purchase price variance is an important metric for。

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