PO :Purchase Price Variance

The variance that you record at the time you receive an item in inventory or supplier services into work in process.

This variance is the difference between the standard unit cost for the item or service and the purchase unit price multiplied by the quantity received.

You record purchase price variances in a purchase price variance account for your organization. Since standard cost is a planned cost, you may incur variances between the standard cost and the purchase order price.