Material Cost Variance Calculator

✖Standard Quality for Actual Output refers to the predetermined or expected quality level of the goods or services produced, based on established standards or specifications.ⓘ Standard Quality for Actual Output [SQAO]			+10% -10%
✖Standard Price refers to the predetermined cost per unit of a particular material based on factors such as historical data, market prices, negotiated contracts, or internal cost estimates.ⓘ Standard Price [STP]			+10% -10%
✖Actual Quantity refers to the real amount or volume of a specific item, material, product, or resource used, consumed, produced, or acquired within a certain timeframe.ⓘ Actual Quantity [ACQ]			+10% -10%
✖Actual Price refers to the real cost per unit of a specific item, material, product, or resource that has been incurred within a certain timeframe.ⓘ Actual Price [ACP]			+10% -10%

✖Material Cost Variance assesses the difference between the actual cost of materials used in production and the standard cost of materials that should have been used for the actual production output.ⓘ Material Cost Variance [MCV]

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Formula

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Material Cost Variance

Formula

`"MCV" = ("SQAO"*"STP")-("ACQ"*"ACP")`

Example

`"356725"=("425"*"855")-("95"*"70")`

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Material Cost Variance Solution

STEP 0: Pre-Calculation Summary

Formula Used

Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price)
MCV = (SQAO*STP)-(ACQ*ACP)
This formula uses 5 Variables

Variables Used

Material Cost Variance - Material Cost Variance assesses the difference between the actual cost of materials used in production and the standard cost of materials that should have been used for the actual production output.
Standard Quality for Actual Output - Standard Quality for Actual Output refers to the predetermined or expected quality level of the goods or services produced, based on established standards or specifications.
Standard Price - Standard Price refers to the predetermined cost per unit of a particular material based on factors such as historical data, market prices, negotiated contracts, or internal cost estimates.
Actual Quantity - Actual Quantity refers to the real amount or volume of a specific item, material, product, or resource used, consumed, produced, or acquired within a certain timeframe.
Actual Price - Actual Price refers to the real cost per unit of a specific item, material, product, or resource that has been incurred within a certain timeframe.

STEP 1: Convert Input(s) to Base Unit

Standard Quality for Actual Output: 425 --> No Conversion Required
Standard Price: 855 --> No Conversion Required
Actual Quantity: 95 --> No Conversion Required
Actual Price: 70 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

MCV = (SQAO*STP)-(ACQ*ACP) --> (425*855)-(95*70)

Evaluating ... ...

MCV = 356725

STEP 3: Convert Result to Output's Unit

356725 --> No Conversion Required

FINAL ANSWER

356725 <-- Material Cost Variance

(Calculation completed in 00.004 seconds)

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Created by Aashna

IGNOU (IGNOU), India

Aashna has created this Calculator and 50+ more calculators!

Verified by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has verified this Calculator and 25+ more calculators!

< 25 Cost Accounting Calculators

Material Cost Variance

Go Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price)

Labour Cost Variance

Go Labour Cost Variance = (Standard Hours for Actual Output*Standard Rate)-(Actual Hours*Actual Rate)

Revised Standard Quantity

Go Revised Standard Quantity = (Standard Quantity of each Material/Total Standard Quantity)*Total Actual Quantity

Learning Curve

Go Learning Curve = (Time Taken to Produce Initial Quantity*Cumulative Number of Batches)^(-Learning Coefficient)

Labour Efficiency Variance

Go Labour Efficiency Variance = Standard Rate*(Standard Time-Actual Time)*Variance

Time to Receive

Go Time to Receive = Time for Stock Validation+Time to Add Stock to Records+Time to Prep Stock for Storage

Labour Rate Variance

Go Labour Rate Variance = Actual Time*(Standard Rate-Actual Rate)*Variance

Cycle Time

Go Cycle Time = Process Time+Inspection Time+Move Time+Queue Time

Revised Standard Hours of Labours

Go Revised Standard Hours of Labours = (Actual Mix/Standard Mix)*(Standard Hours of Labour)

Material Yield Variance

Go Material Yield Variance = (Actual Unit Usage-Standard Unit Usage)*Standard Cost per Unit

Overall Equipment Effectiveness

Go Overall Equipment Effectiveness = Good Count*Ideal Cycle Time/Planned Production Time

Avoided Cost

Go Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost

Material Usage Variance

Go Material Usage Variance = Standard Price*(Actual Quantity Units-Standard Quantity)

Labour Mix Variance

Go Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time)

Material Price Variance

Go Material Price Variance = Actual Quantity*(Standard Price-Actual Price)

Material Quantity

Go Material Quantity = Standard Price*(Standard Quantity-Actual Quantity)

Customer Acquisition Cost

Go Customer Acquisition Cost = Cost of Sales and Marketing/Number of New Customers Acquired

Total Addressable Market

Go Total Addressable Market = Annual Contract Value per Client*Number of Potential Clients

First Pass Yield

Go First Pass Yield = Number of Good Products Finished/Number of Production Orders Started

Average Days Delinquent

Go Average Days Delinquent = Days Sales Outstanding-Best Possible Days Sales Outstanding

Backorder Rate

Go Backorder Rate = (Number of Undeliverable Orders/Total Number of Orders)

Monthly Recurring Revenue

Go Monthly Recurring Revenue = Number of Customers*Average Billed Amount

Sell -Through Rate

Go Sell Through Rate = Number of Units Sold/Number of Units Received

Takt Time

Go Takt Time = Production Available Time/Customer Demand

On-Time Delivery

Go On-Time Delivery = On Time Units/Total Units

Material Cost Variance Formula

Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price)
MCV = (SQAO*STP)-(ACQ*ACP)

What is Material Cost Variance ?

Material Cost Variance is the comparison of the price and quantity based on the standard, planned, and actual costs. The materials price variance focuses on the price paid for materials, and it is defined as the difference between the actual quantity of materials purchased at the actual price and the actual quantity of materials purchased at the standard price. The difference between actual costs and standard (or budgeted) costs is typically explained by two separate variances namely the materials price variance and materials quantity variance. The materials price variance is the difference between actual costs for materials purchased and budgeted costs based on the standards. The materials quantity variance is the difference between the actual quantity of materials used in production and budgeted materials that should have been used in production based on the standards.

How to Calculate Material Cost Variance?

Material Cost Variance calculator uses Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price) to calculate the Material Cost Variance, Material Cost Variance is a term used in cost accounting and financial analysis to measure the difference between the actual cost of materials used in production and the standard cost of those materials. Material Cost Variance is denoted by MCV symbol.

How to calculate Material Cost Variance using this online calculator? To use this online calculator for Material Cost Variance, enter Standard Quality for Actual Output (SQAO), Standard Price (STP), Actual Quantity (ACQ) & Actual Price (ACP) and hit the calculate button. Here is how the Material Cost Variance calculation can be explained with given input values -> 356725 = (425*855)-(95*70).

FAQ

What is Material Cost Variance?

Material Cost Variance is a term used in cost accounting and financial analysis to measure the difference between the actual cost of materials used in production and the standard cost of those materials and is represented as MCV = (SQAO*STP)-(ACQ*ACP) or Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price). Standard Quality for Actual Output refers to the predetermined or expected quality level of the goods or services produced, based on established standards or specifications, Standard Price refers to the predetermined cost per unit of a particular material based on factors such as historical data, market prices, negotiated contracts, or internal cost estimates, Actual Quantity refers to the real amount or volume of a specific item, material, product, or resource used, consumed, produced, or acquired within a certain timeframe & Actual Price refers to the real cost per unit of a specific item, material, product, or resource that has been incurred within a certain timeframe.

How to calculate Material Cost Variance?

Material Cost Variance is a term used in cost accounting and financial analysis to measure the difference between the actual cost of materials used in production and the standard cost of those materials is calculated using Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price). To calculate Material Cost Variance, you need Standard Quality for Actual Output (SQAO), Standard Price (STP), Actual Quantity (ACQ) & Actual Price (ACP). With our tool, you need to enter the respective value for Standard Quality for Actual Output, Standard Price, Actual Quantity & Actual Price and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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