Resources

Cost Accounting

Ryan Forrestal

Purchase Price Variance: The Manufacturing Number Owners Never Look At

Purchase price variance (PPV) is the difference between the standard price a manufacturer planned to pay for a material and the actual price it paid, multiplied by the quantity purchased. A positive result means you paid more than planned. So it is one of the earliest signals that material costs are drifting away from your […]

Read article
Ryan Forrestal

Inventory Turns, Absorption, and the Overhead Your Plant Isn’t Charging

Manufacturing overhead absorption is how a plant assigns fixed overhead, such as rent, equipment depreciation, and supervision, to the units it makes. A predetermined rate, built on normal capacity, therefore spreads the fixed cost across expected output. But when actual output falls short, the unabsorbed overhead does not belong in inventory. Instead, it hits the […]

Read article