Work out material variance instantly with clear inputs, formula shown and shareable results.
Material variance separates purchasing performance from shop-floor performance. The price variance values the difference between standard and actual price at the quantity actually bought, and the usage variance values the quantity difference at standard price, so responsibility is unambiguous.
Price variance
MPV = (Standard price - Actual price) x Actual quantity
Usage variance
MUV = (Standard quantity - Actual quantity) x Standard price
So that a purchasing price change does not contaminate the operations measure. Each variance then has one clear owner.
Buying cheaper, lower-grade material. It is the classic false economy that variance analysis is designed to expose.