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Reasons of Material Variance |
- Change in Basic price.
- Fail to purchase anticipated standard quantities at appropriate price.
- Use of sub-standard material.
- Ineffective use of materials.
- Pilferage.
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| Material Variance |
- Material Cost Variance = (Standard Quantity X Standard Price) – (Actual Qty X Act Price)
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- Material Price Variance = Actual Quantity (Standard Price - Actual Price)
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- Material Usage Variance = Standard Price (Standard Quantity - Actual Quantity)
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