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In case the purchased quantity of material is different from the used quantity of material, the Material Price Variance is calculated using purchasing amount as following:
Material Price Variance = (AP – SP) x AQ purchased
Material Usaged Variance = (AQ used – SQ) x SP
So how can I calculate Material Total Variance, it’s formula is:
Material Total Variance = AQ purchased x AP – SQ x SP
or
Material Total Variance = Material Price Variance + Material Usaged VarianceThanks in advance.
The total material variance is the sum of the price variance and the usage variance.
It is also the difference between the actual total expenditure and the standard cost of the actual production.
I do suggest that you watch our free lectures on variances, where all of this is covered in detail.
(Our free lectures are a complete course for Paper F2 and cover everything needed to be able to pass the exam well)
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