Finance

Direct Material Price Variance Calculator

Analyze the difference between what you expected to pay for materials and what you actually paid.

Standard Price Per Unit ($)

Actual Price Per Unit ($)

Actual Quantity Purchased

Formula:
Material Price Variance = (Standard Price − Actual Price) × Actual Quantity
Favorable: Actual < Standard (spent less)
Unfavorable: Actual > Standard (spent more)

Understanding Material Price Variance

The direct material price variance shows how much the actual cost of materials differed from the expected (standard) cost. It helps management identify purchasing efficiency and negotiate better supplier terms.