Price Variance Calculator

What is Price Variance?

Price variance measures the difference between the actual cost of materials or labor and the standard cost, multiplied by the quantity. It helps businesses identify whether they are spending more or less than expected on their purchases.

How to Use This Calculator

1. Enter the Actual Price - The price you actually paid per unit
2. Enter the Standard Price - The expected or budgeted price per unit
3. Enter the Quantity - The number of units purchased or produced
4. Click the Calculate button to see the price variance

Practical Applications

Price variance analysis is essential for:

• Cost control and budget management
• Supplier performance evaluation
• Identifying areas for cost reduction
• Performance-based decision making

Example

Suppose you expected to pay $10 per widget (standard price), but actually paid $12 per widget, and purchased 100 widgets:

Price Variance = ($12 - $10) × 100 = $200 (positive variance)

This indicates you spent $200 more than expected on widgets.