SAP ‘Indirect Access‘, is an approach that many companies has been using to leverage their investments, -lowering- improving costs regarding their ERP / IT Landscape. This might be , using third party apps or in-house developments.
Aim of this document is to show how price variance is calculated in a context of standard cost.
Standard cost, is a agreement between Engineering and Finance areas, regarding the price of raw materials and operative supplies, this estimated price is a key input to calculate gross margins.
The Purchasing Price Variance or PPV is a warning flag that says that the gross margin will have variance, taking care about the situation, on a nimble way, enable the organization to keep margins going forward.